When Constructing a Statement of Cash Flows, Which of the Following

question 6

Multiple Choice

When constructing a Statement of Cash Flows, which of the following actions would be considered a source of funds?

• A)increase in the cash account
• B)decrease in accounts payable
• C)increase in inventory
• D)increase in long-term bonds
• E)increase in fixed assets

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Definitions:

Average Total Costs

The sum of all the production costs divided by the quantity of output produced, representing the per-unit cost of production.

Average Variable Costs

Costs that vary with the level of output, divided by the quantity of output produced, indicating the variable cost per unit.

Total Fixed Costs

The sum of all costs that remain constant regardless of the level of production or sales in a company.

Marginal Cost

The addition to total cost that results from producing one more unit of output.