A Basic Objective of the Statement of Cash Flows Is

question 26

Multiple Choice

A basic objective of the statement of cash flows is to

• A) Supplant the income statement and balance sheet
• B) Disclose changes during the period in all asset and all liability accounts
• C) Disclose the change in working capital during the period
• D) Provide essential information for financial statements users in making economic decisions

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Definitions:

Weighted-Average Method

A cost accounting method that assigns the average cost of goods available for sale to both ending inventory and units sold.

Assembly Department

A department within a manufacturing facility where components are assembled into finished products.

Materials

The raw items or components used in the manufacturing process to produce goods or services.

Conversion Costs

The combined costs of direct labor and manufacturing overhead incurred to convert raw materials into finished products.