Assume That a Statement of Cash Flows Reports Increases and Decreases

question 40

Multiple Choice

Assume that a statement of cash flows reports increases and decreases in current asset accounts. Which of the following is true?

• A)Increases and decreases in current assets are not reported on the statement of cash flows.
• B)Increases and decreases in current assets are reported when using both the direct and indirect methods.
• C)The statement was prepared using the direct method.
• D)The statement was prepared using the indirect method.

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Definitions:

Industry Supply Curve

A graphical representation showing the total quantity of a good or service that producers in an industry are willing and able to supply at different price levels.

Marginal Cost Curves

A graphical representation showing how the cost of producing one more unit of a good varies with the quantity of the good produced.

AVC

Average Variable Cost, which is the total variable costs divided by the quantity of output produced.

Average Variable Cost

The total variable costs (costs that change with production volume) divided by the quantity of output produced.