Use the Following Codes to Indicate How the Cash Flow

question 2

Multiple Choice

Use the following codes to indicate how the cash flow effect, if any, of each transaction or event would be reported on a statement of cash flows if the operating activities section is prepared using the indirect method. (Choices may be used more than once.)
-Issued stock to buy a building.

• A)Operating activity--add to net income
• B)Operating activity--deduct from net income
• C)Inflow from investing activity
• D)Outflow from investing activity
• E)Inflow from financing activity
• F)Outflow from financing activity
• G)Noncash investing and financing activity
• H)Not reported on statement of cash flows

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Definitions:

Direct Labor-Hours

Direct labor-hours are the total hours worked by employees directly involved in the production of goods or services, used for costing and operational efficiency assessment.

Predetermined Overhead Rate

calculates an estimated overhead cost per unit of activity, aiding in assigning indirect costs to products or services.

Plantwide Predetermined Overhead Rate

A single overhead rate calculated for an entire manufacturing plant, applied to all units produced irrespective of department or product differences.

Job-Order Costing System

A cost accounting system that assigns costs to specific production batches or jobs, useful for customized orders.