When Preparing the Statement of Cash Flows Using the Indirect

question 78

Multiple Choice

When preparing the statement of cash flows using the indirect method,an increase in inventories would appear as:

• A) a decrease in the operating activities section
• B) an increase in the operating activities section
• C) a use of cash in the investing activities section
• D) a source of cash in the investing activities section

Understand the concept of break-even point in units and dollars.

Apply the break-even analysis to different sales mixes and product scenarios.

Calculate the effect of changes in fixed and variable costs on the break-even point.

Interpret cost-volume-profit (CVP) charts and understand their significance.

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Definitions:

Calorie

A unit used to measure the amount of energy food produces; the amount of energy needed to raise the temperature of 1 kg of water by 1°C.

Calories

Units of energy that measure the amount of energy food provides to the body.

Fat

A macronutrient that is a major source of energy for the body and aids in the absorption of vitamins.

Immediate Fuel

Energy sources that are quickly available to the body for immediate use, such as glucose.