Which of the Following Would Appear on a Statement of Cash

question 192

Multiple Choice

Which of the following would appear on a statement of cash flows prepared using the direct method?

• A)Cash payments for salaries would appear on the statement.
• B)A loss of the sale of equipment would appear on the statement.
• C)Amortization expenses would appear on the statement.
• D)Depreciation expenses would appear on the statement.

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Definitions:

Cost Function

A mathematical relation that describes how the total cost of producing a good or service varies with the level of output.

Diseconomies of Scope

The phenomenon where a company’s costs increase as it produces more varied types of products or services, due to inefficiencies.

Returns to Scale

The rate at which output increases as inputs are increased proportionately.

Economies of Scope

Cost advantages companies experience when they increase the variety of products produced, as opposed to increasing the volume of a single product (economies of scale).