Assume the indirect method is used to compute net cash flows from operating activities. For this item extracted from the financial statements—Interest Expense (assume that cash payments are equal to amount reported)—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
C
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Which of the following practices helps an individual survive in a financial crisis?
A. Spending more than his or her earnings to maintain a good lifestyle B. Investing small amounts regularly to achieve long-term financial goals C. Establishing an emergency fund with 6 months' worth of income D. Developing financial plans only after reaching the highest tax brackets E. Planning tax without considering tax shelters
A business purchases an airplane from an airplane manufacturer. The business obtains a loan to purchase the airplane from a bank, which obtains a security interest in the airplane
The airplane manufacturer is paid for the airplane out of the proceeds of the loan. This is a(n) ________ transaction. A) two-party secured B) three-party secured C) perfected D) attached
When the employees at SignalCorp went on strike, the firm hired replacement workers. This is called a lockout.
Answer the following statement true (T) or false (F)
The allocation of a plant asset's cost to expense over its useful life is called ________
A) residual value B) book value C) accrued revenue D) depreciation