Changes in the Current Asset and Current Liability Accounts Are

question 111

Multiple Choice

Changes in the current asset and current liability accounts are reported on the statement of cash flows, using the indirect method, as:

• A)operating activities.
• B)financing activities.
• C)investing activities.
• D)a mix of all of these.

Explain the accounting and reporting requirements for estimated liabilities and provide examples.

Understand the process of calculating and recording payroll and related taxes, including federal and state unemployment taxes, FICA taxes, and withholdings.

Learn to estimate and record employer expenses related to employee benefits such as bonuses and warranty expenses.

Acquire skills to calculate net pay from gross earnings, considering various deductions and taxes.

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Definitions:

Operating Income

Earnings from a company's primary business activities, excluding revenues and expenses from investments or other non-operational sources.

Variable Costing

An accounting method that only allocates variable costs to inventory, treating fixed costs as expenses of the period.

Absorption Costing

A method of costing that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Operating Income

Operating income is the profit realized from a company's regular business operations, excluding deductions of interest and taxes, as well as any gains or losses from non-operating activities.