In Determining Cost of Goods Sold, Two Alternate Costing Concepts

question 107

True/False

In determining cost of goods sold, two alternate costing concepts can be used: absorption costing and variable costing.

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Definitions:

Direct Method

A way of preparing the cash flow statement in which actual cash flow information from the company's operations segment is used, rather than being derived from the income statement.

Operating Activities

Activities that constitute the primary or main activities of an organization, such as selling products or services.

Data Accumulation

The process of collecting, organizing, and storing data for analysis and decision-making purposes.

Investing Activities

Transactions involving the acquisition or disposal of long-term assets and investments not considered cash equivalents.