Using the Direct Method of Preparing the Statement of Cash

question 81

Multiple Choice

Using the direct method of preparing the statement of cash flows, which of the following is not an activity generating operating cash flows?

• A)Collections from customers
• B)Collection of notes receivable
• C)Payments for income taxes
• D)Payments to employees

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Definitions:

Marginal Revenue

The additional income received from selling one more unit of a product.

Marginal Cost

The additional financial outlay required for producing another unit of a product or service.

Maximizes Profits

A strategy or condition where a business adjusts its operations, production, and pricing to achieve the highest possible financial gain.

MR = MC

A condition in economics where marginal revenue equals marginal cost, often used to determine the optimal level of production and pricing for firms.