On the Statement of Cash Flows,which of the Following Are

question 45

Multiple Choice

On the Statement of Cash Flows,which of the following are considered operating activities?
I.costs of goods sold
II.decrease in accounts payable
III.interest paid
IV.dividends paid

• A)I and III only
• B)III and IV only
• C)I, II, and III only
• D)I, III, and IV only
• E)I, II, III, and IV

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Definitions:

Product Costs

The total costs directly tied to the creation of a product, encompassing direct labor, direct materials, and manufacturing overhead.

Period Costs

Expenses that are not directly tied to production activities and are accounted for as expenses in the period they are incurred, such as selling, general, and administrative expenses.

Conversion Costs

The sum of direct labor and manufacturing overhead costs, representing the total expenses necessary to transform raw materials into finished goods.

Materials Purchased

This refers to the raw materials bought by a company for the production of goods.