While the indirect method is prevalent in the construction of cash flow statements in the U.S., why might a firm choose to construct its cash flow statement using the direct method?
a. The direct method will always show a higher net change in cash.
b. The direct method is usually easier for users to understand.
c. The direct method is required by some industries.
d. The direct method will always make the firm's management look better.
e. None of the above answer choices is correct.
B
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Tina purchases a personal residence for $278,000, but subsequently converts the property to rental property when its FMV is $275,000. Assume depreciation of $65,000 has been deducted after conversion to rental use. If Tina sells the property for $200,000, her realized gain or loss will be
A. ($78,000) loss. B. ($13,000) loss. C. ($10,000) loss. D. ($75,000) loss.
Which of the following statements is NOT accurate?
a. Ensure the business plan contains at least 40 pages since readers may view a shorter plan as inadequately developed. b. Binding the appendices separately may make the plan appear to be easier and less time-consuming to read. c. Number all pages; use index tabs to divide main sections; and identify sections and subsections clearly. d. An entrepreneur may safely hire someone to help organize, revise, and edit his or her business plan. e. The success of a business plan depends in part on its ability to maintain readers' interest.
The UCC makes a distinction between a professional and an occasional seller
Indicate whether the statement is true or false
Organizations that combine raw materials, machinery, and labor to produce goods are called
A. manufacturing businesses. B. service businesses. C. merchandisers. D. market intermediaries. E. processors.