When an Entry Is Made to Adjust the Supplies Account

question 104

Multiple Choice

When an entry is made to adjust the supplies account and recognize supplies expense for the period, which section of the statement of cash flows is affected?

• A) Cash Flow from Operating Activities
• B) Cash Flow from Investing Activities
• C) Cash Flow from Financing Activities
• D) There is no effect on the statement of cash flows.

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Definitions:

Component

A distinct and often smaller part of a larger system, that contributes to the overall functionality or structure of that system.

Payout Ratio

A financial metric indicating the percentage of earnings a company pays to its shareholders in the form of dividends.

Earnings Distributed

The portion of a company's profit paid out to shareholders, typically in the form of dividends.

Intraperiod Tax Allocation

This accounting technique involves allocating income tax expense or benefit among different components of comprehensive income within a single reporting period.