Which of the Following Statements About the Statement of Cash

question 137

Multiple Choice

Which of the following statements about the statement of cash flows is not correct?

• A)It does not replace the income statement.
• B)It provides details as to how cash changed during a period.
• C)It provides information about cash receipts and cash payments over a period of time.
• D)It measures profitability.

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Definitions:

Activity Rate

An activity rate is the cost driver rate used in activity-based costing to allocate overhead costs to products or services.

Activity-based Costing

An accounting method that assigns costs to products or services based on the activities and resources that go into their production, providing more accurate cost information.

Resource Consumption

The use of resources (such as raw materials, energy, or labor) by a process, project, or activity, typically measured to manage efficiency and costs.

Activity-based Costing

A costing methodology that assigns costs to products or services based on the resources they consume.