Using the Indirect Method to Prepare the Statement of Cash

question 27

Multiple Choice

Using the indirect method to prepare the statement of cash flows,dividends paid during the year are:

• A)subtracted from net income in the operating activities section.
• B)added to net income in the operating activities section.
• C)shown as a cash outflow in the financing activities section.
• D)shown as a cash outflow in the investing activities section.

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Definitions:

Direct Labor Efficiency Variance

A measure that analyses the variance between the actual hours worked and the standard hours set for producing a certain number of units.

Deadbolt Locks

A locking mechanism distinct from spring bolt lock, offering more security by requiring a key or knob to move the lock into the locked and unlocked positions.

Materials Quantity Variance

The difference between the actual and standard quantity of materials used times the standard price.

Materials Price Variance

The difference between the actual price and standard price of raw materials times the actual quantity used or purchased.