Which of the Following Is a Cash Outflow for a Financing

question 73

Multiple Choice

Which of the following is a cash outflow for a financing activity on the statement of cash flows?

• A) purchase of long-term investments, such as the stock of another company
• B) loans made to another party
• C) purchase of treasury stock
• D) purchase of land

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Definitions:

Work in Process

Also known as work in progress, it denotes the cost of unfinished goods in manufacturing at any given time.

Direct Labour Cost

The wages paid to workers who are directly involved in the manufacturing or production process.

Direct Materials Cost

Direct materials cost refers to the expenditure on the raw materials that are directly identifiable and allocable to the production of a product.

Overapplied Overhead

This refers to a situation in which the allocated overhead cost is greater than the actual overhead cost incurred.