Which of the Following Is Incorrect Regarding the Financing Activities

question 109

Multiple Choice

Which of the following is incorrect regarding the financing activities section of a statement of cash flows?

• A)Increases in contributed capital accounts suggest cash inflows occurred from issuing equity instruments.
• B)Decreases in long-term debt accounts suggest cash outflows occurred for payment of debt.
• C)Increases in short-term notes payable accounts suggest cash outflows occurred from issuing notes or bonds.
• D)Decreases in retained earnings suggest cash outflows occurred to pay dividends.

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Definitions:

Overhead Costs

Indirect costs related to the general operation of a business that cannot be directly tied to a specific product or service.

Financial Accounting

The field of accounting that focuses on the preparation of financial statements for external users, such as investors, regulators, and suppliers.

Managerial Accounting

A field of accounting focused on providing financial data and analysis to managers within organizations to facilitate informed decision-making.

Internal Control System

A process implemented by a company to help ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.