Which of the Following Adjustments to Net Income Is NOT

question 5

Multiple Choice

Which of the following adjustments to net income is NOT correct if you want to calculate cash flow from financing activities?

• A)Add dividends paid
• B)Add any increase in long-term borrowing
• C)Add proceeds from sale of stock
• D)Add any increase in short-term borrowing

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Definitions:

Job Order Cost System

A cost accounting system in which costs are assigned to each job or batch.

Overhead Volume Variance

The difference between the expected (budgeted) and actual overhead costs attributed to a change in production volume.

Normal Capacity

The average level of operational output that can be sustained over a period under normal conditions, taking into account regular downtime and maintenance.

Standard Costs

Standard costs are predetermined or estimated prices used to measure the efficiency of operations and the performance of a company against set benchmarks.