Harrison Company Uses the Indirect Method to Prepare Its Statement

question 41

Multiple Choice

Harrison Company uses the indirect method to prepare its statement of cash flows. Please refer to the following information for the year 2014: What was the amount of dividends paid during the year?

• A)$5,000
• B)$2,000
• C)Zero
• D)$3,000

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Definitions:

Outsourcing Production

The business practice of having goods or services produced by external organizations, typically to reduce costs.

Absorption Costing

An accounting methodology that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed manufacturing overhead) in the cost of a product.

Required Rate of Return

The minimum expected return on an investment necessary for it to be considered a worthwhile endeavor.

Economic Value

The value of an asset derived from its ability to generate income, benefits, or utility for its owner.