Which Would NOT Be Included in the Operating Activities Section

question 52

Multiple Choice

Which would NOT be included in the operating activities section of a direct method statement of cash flow?

• A) Changes in accounts payable
• B) Changes in accounts receivable
• C) Changes in inventory
• D) Changes in long-term notes payable

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Definitions:

FIFO Method

A inventory valuation method where the first items produced or acquired are sold or used first.

Work in Process Inventory

Products that are currently under production but have not yet reached completion.

Weighted-Average Method

An inventory costing method that assigns cost based on the average cost of goods available for sale during the period.

FIFO Method

An inventory valuation method that assumes the first items placed into inventory are the first sold.