Assume the indirect method is used to compute net cash flows from operating activities. For this item extracted from the financial statements-Loss on Disposal of Equipment-indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:
A) Add to net income to arrive at net cash flows from operating activities.
B) Subtract from net income to arrive at net cash flows from operating activities.
C) Not used to adjust net income to calculate net cash flows from operating activities.
A
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Which if the following is not true about the retail inventory method?
a. It is used to estimate ending inventory; b. A ratio of cost divided by retail price is used in the computation; c. Records of both the cost and the selling prices must be kept; d. Companies that use this method are also likely to use the specific identification method; e. It is a variation of the gross profit method.
Investments are valued on the balance sheet at the original purchase price, even if the price has changed since the date of purchase
Indicate whether the statement is true or false
The rate of interest that produces a zero net present value when a project's discounted cash operating advantage is netted against its discounted net investment is the
a. cost of capital. b. discount rate. c. cutoff rate. d. internal rate of return.
If it can be shown that a trespass to land was warranted, a complete defense exists
a. True b. False Indicate whether the statement is true or false