Expenses That Are Not Easily Associated with a Specific Department

question 185

Multiple Choice

Expenses that are not easily associated with a specific department, and which are incurred for the joint benefit of more than one department, are:

• A) Fixed expenses.
• B) Direct expenses.
• C) Variable expenses.
• D) Indirect expenses.
• E) Uncontrollable expenses.

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Definitions:

Indirect Method

A method used in cash flow statement preparation that adjusts net income for non-cash transactions, deferrals, and accruals.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against an asset since it was put into use, reducing its book value.

Investing Activity

Financial transactions related to the acquisition or disposal of long-term assets and investments, reflected in a company's cash flow statement.

Indirect Method

A method used in cash flow statements to adjust net income for non-cash transactions and changes in working capital to calculate net cash provided by operating activities.