Computing Cash Generated from Operating Activities Is

question 138

Multiple Choice

Computing cash generated from operating activities is

• A)the same for both the direct and indirect methods.
• B)different in that the indirect method considers depreciation.
• C)different in that the direct method considers depreciation.
• D)none of the above.

---

Definitions:

Further Processing Costs

Additional costs incurred when processing products beyond their initial production stage to enhance their value.

Selling Price

The amount a seller charges a buyer for a product or service, determined by various factors including cost, demand, and competition.

Variable Overhead Costs

Overhead costs that fluctuate with the level of production activity, such as utilities for the manufacturing plant.

Operating Capacity

The maximum output or productivity level that a company can achieve using its current resources under normal working conditions.