In a Statement of Cash Flows, a Change in the Inventories

question 90

Multiple Choice

In a statement of cash flows, a change in the inventories account would be classified as:

• A) an operating activity.
• B) a financing activity.
• C) an investing activity.
• D) a noncash item that need not appear on the statement of cash flows.

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Definitions:

Departments

Divisions within an organization, each focusing on a specific area of function, such as sales or human resources.

Products

Products are items or services created through a process and made available for consumer purchase or use, serving identified market needs or desires.

Production Department

A unit or section within a company responsible for the actual production of goods or services.

Plantwide Factory Overhead Rates

These rates are applied uniformly across all production activities in a plant to allocate indirect costs to products.