Operating Activities

question 186

Multiple Choice

Operating activities:

• A) Are also called strategic management.
• B) Are the means organizations use to pay for resources like land, buildings and equipment.
• C) Are also called asset management.
• D) Involve acquiring and disposing of resources that a business uses to acquire and sell its products or services.
• E) Involve using resources to research, develop, purchase, produce, distribute and market products and services.

Analyze the financial implications of costing and pricing decisions on gross profit.

Understand the concept of overapplied and underapplied overhead and how it is disposed of in cost accounting.

Calculate predetermined overhead rates and understand their use in cost allocation.

Identify the components of manufacturing costs, including direct materials, direct labor, and factory overhead.

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Definitions:

Disbursements

The act of paying out or distributing money, often by a business for various expenses.

Equipment Account

An account that tracks the cost of equipment a company owns, minus any accumulated depreciation.

Liability Account

An account that records obligations or amounts owed to others that will require a future outflow of resources.

Liabilities

Financial obligations or debts owed by a business to others, which must be settled over time through the transfer of economic benefits including money, goods, or services.