If a company borrows money from a bank, the interest paid on this loan should be reported on the statement of cash flows as a(n):
A. This is not reported in the statement of cash flows.
B. Operating activity.
C. Financing activity.
D. Investing activity.
E. Noncash investing and financing activity.
Answer: B
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List the steps in the accounting cycle.
What will be an ideal response?
For firms like Apple and Samsung, competition
A. is not a factor that must be considered in a free-market economy. B. affects smaller businesses but not large chain operations. C. affects larger chain operations but not smaller businesses. D. is a rivalry among businesses for sales to potential customers. E. is a problem that has been eliminated in the twenty-first century.
The Securities and Exchange Commission is responsible for:Full and FairDisclosure ofInformationRegulatingSecuritiesMarkets Assessing the Qualityof RegisteredSecurities
A.
| Yes | Yes | No |
B.
| Yes | Yes | Yes |
C.
| No | Yes | Yes |
D.
| Yes | No | Yes |
Mistake. Steven Lanci was involved in an automobile accident with an uninsured motorist. Lanci was insured with Metropolitan Insurance Co, although he did not have a copy of the insurance policy. Lanci and Metropolitan entered settlement negotiations,
during which Lanci told Metropolitan that he did not have a copy of his policy. Ultimately, Lanci agreed to settle all claims for $15,000, noting in a letter to Metropolitan that $15,000 was the "sum you have represented to be the . . . policy limits applicable to this claim." After signing a release, Lanci learned that the policy limits were actually $250,000, and he refused to accept the settlement proceeds. When Metropolitan sued to enforce the settlement agreement, Lanci argued that the release had been signed as the result of a mistake and therefore was unenforceable. Should the court enforce the contract? Explain.