Activities That Affect Costs Are Often Called

question 56

Multiple Choice

Activities that affect costs are often called

• A) cost drivers.
• B) stages of production.
• C) fixed activities.
• D) variable activities.

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Definitions:

Indirect Method

A way of reporting cash flows from operating activities by starting with net income and adjusting for items that affected reported net income but didn't involve actual cash flows.

Operating Activities

Activities directly related to the day-to-day business operations, including cash flows from selling products or providing services.

Preferred Shares

A class of ownership in a corporation that has a higher claim on assets and earnings than common shares, often with fixed dividends.

Financing Activities

Transactions related to raising capital and repaying investors, including issuing equity, obtaining loans, and paying dividends.