In Determining Cash Flows from Operations, Which Method Starts with Net

question 83

Multiple Choice

In determining cash flows from operations, which method starts with net income, then add noncash expenses and subtracts noncash revenues?

• A)direct method
• B)fixed method
• C)indirect method
• D)funds flow method
• E)variable method

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Definitions:

Weighted-Average Method

an inventory costing method that assigns a cost to inventory and to the goods sold based on the average cost of all similar items available during a certain period.

Work in Process Inventory

The value of raw materials, labor, and overhead costs for products that are partially completed but not yet ready for sale.

Transferred Out

In a process costing environment, it refers to goods that have been completed in one department and moved to the next stage in the production process.

Production Costs

The total expenses incurred in the process of manufacturing or producing goods, including labor, materials, and overhead costs.