Which of the Following Statements Is CORRECT

question 49

Multiple Choice

Which of the following statements is CORRECT?

• A) In the statement of cash flows, a decrease in accounts receivable is reported as a use of cash.
• B) Dividends do not show up in the statement of cash flows because dividends are considered to be a financing activity, not an
• Operating activity.
• C) In the statement of cash flows, a decrease in accounts payable is
• Reported as a use of cash.
• D) In the statement of cash flows, depreciation charges are reported
• As a use of cash.
• E) In the statement of cash flows, a decrease in inventories is
• Reported as a use of cash.

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Definitions:

Job-Order Costing

An accounting method used to track the costs associated with each unique job or order, suitable for customized or non-repetitive products.

Direct Labor Cost

The wages and other costs for labor that is directly involved in the production of goods.

Manufacturing Overhead

All manufacturing costs except direct labor and direct materials, including maintenance and utilities.

Direct Labor Cost

The wages and benefits paid to workers who are directly involved in the production of goods or the provision of services.