Which of the Following Transactions Will Result in a Decrease

question 42

Multiple Choice

Which of the following transactions will result in a decrease in cash flow from operations?

• A) Increase in accounts receivable
• B) Decrease in inventories
• C) Decrease in taxes payable
• D) Decrease in bonds outstanding

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Definitions:

Variable Costing

Variable costing is an accounting approach that includes only variable production costs (materials, labor, and overhead) in product costs, omitting fixed costs.

Net Income

The total profit of a company after all expenses, taxes and costs have been subtracted from total revenue.

Variable Manufacturing Costs

Costs that vary directly with the level of production output, such as raw materials and direct labor.

Break-Even Point

The point at which total revenues equal total costs, meaning no profit or loss is incurred.