Using the Indirect Method, an Increase in Accounts Receivable Is

question 49

True/False

Using the indirect method, an increase in accounts receivable is subtracted from net income in calculating cash flows from operating activities.

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Definitions:

Variable Costing

A costing method that includes only variable production costs in product costs, treating fixed costs as period expenses.

Absorption Costing

An accounting method that includes all manufacturing costs, both fixed and variable, in the cost of a product.

Unit Sales

The total number of individual items or units sold by a company in a specific period.

Absorption Costing

A financial recording approach that encompasses all production expenses, including direct materials, direct labor, and overhead costs, both variable and fixed, in the pricing of a product.