In Cash Flow Calculations,cash Flow Sign Convention Requires Us to

question 36

Multiple Choice

In cash flow calculations,cash flow sign convention requires us to

• A) assign a positive sign in front of cash inflows and a negative sign in front of cash outflows.
• B) assign a negative sign in front of cash inflows and a positive sign in front of cash outflows.
• C) assign a positive sign in front of both cash inflows and cash outflows.
• D) assign no signs. None of the cash flows need signs assigned to them.

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Definitions:

Support Department Costs

Expenses that are not directly tied to the production of goods or services but are necessary for supporting the operations of a business, like IT or HR departments.

Direct Method

A way of presenting the cash flow statement where major classes of gross cash receipts and payments are disclosed, offering a more straightforward view of cash flow from operating activities.

Cafeteria Department Costs

Expenses associated with operating a company's cafeteria, including food, labor, and overhead costs.

Sequential Method

A procedure in cost accounting for allocating service department costs to producing departments in a specific order.