Wesley,Inc

question 138

True/False

Wesley,Inc.uses the indirect method to prepare the statement of cash flows.Refer to the following section of the comparative balance sheet:

The change in Merchandise Inventory is shown as a negative cash flow in the adjustments to net income.

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Definitions:

Standard Cost System

A standard cost system estimates the costs of production in advance, using standard rates for materials and labor to assess efficiency and performance.

Cost of Goods Sold

Financial outlays directly resulting from the creation of goods a business trades, including materials and manpower.

Standard Cost Variances

The differences between the expected standard costs of manufacturing a product and the actual costs incurred.

Work in Process Inventories

Partially completed goods that are still undergoing the production process.