Assume that the balance of accounts payable does not change during a period. When preparing a statement of cash flows, an increase in ending inventory over beginning inventory will result in an adjustment to net income under the indirect approach because
A) the amount of cost of goods sold is equal to the amount of cash paid for purchases.
B) consumed inventory is an expense but not a use of funds.
C) the amount of cost of goods sold on an accrual basis is less than the amount of cash paid for purchases of inventory.
D) the amount of cash paid for purchases of inventory is less than the amount of cost of goods sold on an accrual basis.
C
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In a troubled debt restructuring that involves only a modification of terms, if the amount to be repaid is greater than the current carrying value of the liability
A) no gain or loss would be recognized by the debtor. B) an ordinary gain would be recognized by the debtor. C) a prior period adjustment would be recognized by the debtor. D) an ordinary loss would be recognized by the debtor.
Since the number of shares changes under both a stock dividend and a stock split, any ratio based on the number of shares must be restated
Indicate whether the statement is true or false
Costs such as salary of supervisors and other support personnel, which are accounted for as overhead costs, are called
A) period labor costs. B) sales assistance costs. C) indirect labor costs. D) prime labor costs.
In which of the following scenarios can segmentation on the basis of customer industries be
used? A) Many manufacturers make many products bought by a single large company operating in a number of industries. B) Many manufacturers make a single product bought by a single large company which operates in different industries. C) A manufacturer makes a product bought by many small or large companies operating in different industries. D) A manufacturer makes several products bought by two or more competing companies within the same industry.