Costs That Do NOT Change as the Result of a Future

question 76

Multiple Choice

Costs that do NOT change as the result of a future decision are known as:

• A) Out-of-pocket costs
• B) Variable costs
• C) Sunk costs
• D) Differential costs

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Definitions:

Treasury Stock

Stock that has been issued but has been bought back by the corporation or received as a gift.

Net Cash

Describes the amount of cash remaining after all cash expenditures, or disbursements, are subtracted from the cash receipts during a given period.

Indirect Method

A method used in accounting to calculate cash flows from operating activities, adjusting net income by changes in non-cash accounts.

Direct Method

A technique used in cash flow statements to present cash activities directly related to operating activities.