Amortization of the premium on bonds payable is subtracted from net income in the reconciliation of net income to cash flows from operations because
a. interest expense understates the cash paid for interest by the amount of the premium amortization.
b. it reduces income without causing a cash outflow.
c. it increases income without causing a cash flow.
d. it is a financing cash outflow.
A
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A basic tenet of variable costing is that fixed overhead costs should be currently expensed. What is the basic rationale behind this procedure?
a. Fixed overhead costs will occur whether or not production occurs and so it presents a clearer picture of how changes in production volume affect costs and income. b. Fixed overhead costs are generally immaterial in amount and the cost of assigning the amounts to specific products would outweigh the benefits. c. Allocation of fixed overhead costs is arbitrary at best and could lead to erroneous decisions by management. d. Fixed overhead costs are uncontrollable and should not be charged to a specific product.
Which of the following items should be classified as an extraordinary item on a corporate income statement?
a. Excess of the selling price over the cost of treasury stock b. Loss due to takeover of property by a foreign government c. Gain on the sale of a long-term investment d. Loss due to discontinued operations
The early majority are the very first customers to try a product
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People often delete or read email based upon the subject line alone
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