Inventory Costing Methods Place Primary Reliance on Assumptions About the Flow

question 115

Multiple Choice

Inventory costing methods place primary reliance on assumptions about the flow of

• A)costs.
• B)goods.
• C)resale prices.
• D)values.

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Definitions:

Cash Dividends

Payments made by a corporation to its shareholders from its profits in the form of cash.

Financing Activities

Transactions related to raising capital and repaying investors, including debt, equity, and dividends.

Common Stock

Common stock represents ownership shares in a corporation, giving holders voting rights and a residual claim on corporate earnings in the form of dividends.

Indirect Method

The indirect method is a way of preparing the cash flow statement in which net income is adjusted for changes in balance sheet accounts to compute the cash flow from operating activities.