Under the Direct and Indirect Methods of Preparing the Statement

question 85

Multiple Choice

Under the direct and indirect methods of preparing the statement of cash flows, cash receipts from financing activities include:

• A)sale of plant assets.
• B)selling treasury stock.
• C)issuing common stock for cash.
• D)both B and C.

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Definitions:

Variable Selling

Expenses that change in proportion to the volume of goods or services sold, such as commissions and shipping fees.

Special Order

A one-time order that is not usually part of the company's normal ongoing operations, often requiring special pricing or terms.

Markup

The uplift in the purchase price of items specifically to recover operational overhead and to make a profit.

Split-off Point

The stage in a production process where multiple products are derived from a single process or material, leading to separate further processing.