What Does the Statement of Cash Flows Allow Management to Assess

question 4

Multiple Choice

What does the statement of cash flows allow management to assess?

• A)Efficiency in earning profit
• B)Efficiency in controlling expenses
• C)Efficiency in managing cash flows
• D)Efficiency in managing industrial relations

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Definitions:

Direct Material

Raw materials that are directly involved in the production process of a product and can be easily traced to it.

Steel

An alloy of iron and carbon (and possibly other elements) that is hard, strong, and used as a structural and fabrication material.

Lumber

Wood that has been processed into beams and planks, a stage in the process of wood production.

Period Costs

Expenses that are not directly tied to the production of goods, such as selling, general, and administrative costs, and are expensed in the period they are incurred.