Which of the Following Items Would Be Added to Net

question 52

Multiple Choice

Which of the following items would be added to net income when using the indirect method of calculating cash flows provided by operating activities?

• A)An decrease in accounts payable
• B)An decrease in prepaid expenses
• C)A decrease in accrued revenues
• D)A decrease in taxes payable

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Definitions:

Variable Overhead Efficiency Variance

A measure used in cost accounting to evaluate the efficiency of variable production costs, comparing the actual hours worked to the standard hours expected.

Materials Price Variance

The difference between the actual cost of materials and the expected (standard) cost.

Labor Rate Variance

A measure used in cost accounting to analyze the difference between the actual labor cost incurred and the standard labor cost for the actual labor hours worked.

Variable Overhead Efficiency Variance

Refers to the difference between the standard cost of variable overheads for the actual production level and the actual variable overheads incurred.