Which of the Following Sections of the Statement of Cash

question 24

Multiple Choice

Which of the following sections of the statement of cash flows include activities that affect Net Income on the income statement? (Assume the indirect method is used.)

• A)the financing section
• B)the operating section
• C)the investing section
• D)the non-cash investing and financing section

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Definitions:

Absorption Costing

A financial strategy that absorbs all the manufacturing outlays, encompassing direct materials, workforce costs, alongside both adaptable and unchanging manufacturing overheads, into the cost of a product.

Unit Product Cost

The cost allocated to a single unit of product, encompassing direct materials, direct labor, and allocated overhead costs.

Income Statement

A financial report outlining the revenues, expenses, and profits or losses of a company over a specific period.

Fixed Manufacturing Overhead

Costs associated with production that do not change with the level of output, such as rent for factory facilities or salaries of permanent staff.