When Using the Indirect Method, How Would the Retirement of Bonds

question 34

Multiple Choice

When using the indirect method, how would the retirement of bonds payable at their maturity date be shown on the statement of cash flows?

• A) Operating activity
• B) Investing activity
• C) Financing activity
• D) Noncash investing and financing activity

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Definitions:

Direct Material Quantity Variance

The difference between the expected and actual quantity of materials used in production, affecting the total manufacturing cost.

Direct Labour Rate Variance

The difference between the actual cost of direct labor and the standard cost, which shows how well labor costs are being managed.

Direct Labour Efficiency Variance

The difference between the expected amount of labor hours needed to produce a given level of output and the actual labor hours used.

Favourable Variances

Differences between actual costs and budgeted costs that result in a better-than-expected financial performance, often indicating cost savings or higher revenues.