Operating Cash flOw Is Defined As

question 121

Multiple Choice

Operating cash flow is defined as:

• A) Earnings before interest and taxes minus depreciation plus taxes.
• B) The change in net working capital plus depreciation minus taxes.
• C) Earnings before interest and taxes plus depreciation minus taxes.
• D) Sales minus costs minus depreciation plus taxes.
• E) Sales minus variable costs minus fixed costs minus depreciation minus taxes.

---

Definitions:

Physical Inventory Count

A physical inventory count is the manual process of counting all the goods a company physically has on hand at a specific time to verify stock records and values.

First-In, First-Out

An inventory valuation method where the goods first produced or acquired are sold or used first, presuming that the oldest inventory items are consumed before newer ones.

Ending Inventory

The value of goods available for sale at the end of an accounting period, after purchases and sales have been accounted for.

Average Cost Formulas

A method used in accounting to calculate the cost of goods sold and ending inventory by averaging the cost of all items available for sale during the period.