Firms typically report cash flows from operations using the indirect method. The indirect method starts with net income, then adds any expense amount that does not use cash, and subtracts any revenue amount that does not provide cash. The adjustments to convert net income to cash flow from operations generally does not involve
a. adding the amount by which an expense exceeds the related cash expenditure for the period.
b. subtracting the amount by which a revenue exceeds the related cash receipt for the period.
c. adding credit changes in operating non-cash working capital accounts.
d. subtracting debit changes in operating working capital accounts.
e. subtracting the amount by which an expense exceeds the related cash expenditure for the period.
E
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Collateral is a(n) ________ that a borrower promises to give to the bank if that borrower is unable to repay the bank’s loan.
A. document B. liability C. asset D. interest payment
Ratio analysis ________.
A) cannot be used to evaluate a company's financial condition B) is used most effectively to compare a company against other companies in the same industry and to denote trends within the company C) cannot be used to compare a company against other companies in the same industry because the necessary information is not available D) cannot be used to evaluate a company's performance
Which of the following statements is true about a deposit?
A) it is an amount paid at the beginning of the contract as a sign of good faith B) it can be forfeited if the transaction is not completed by the fault or choice of the depositor C) All of the above D) it can be accepted by the innocent party as the complete payment or remedy for damages and the innocent party cannot sue for more E) it will be considered a penalty if it exceeds more than 10% of the total price
Jamie is building a house on her lot. She invites Earnie of Earnie's Excavation to bid on the excavation job. Earnie observes that the lot next to Jamie's is also under excavation and the soil in that lot is normal and not excessively rocky. Based on the assumption that the soil in Jamie's lot will be similar, he and Jamie agree that the excavation will cost $3,000 . When Earnie starts digging,
he learns there is solid rock under Jamie's lot. Earnie says it will cost an extra $2,500 for the excavation work. Jamie agrees just to get the job done but later refuses to pay a dime more than $3,000 . If Earnie sues, the most likely result would be a. Jamie wins, as Earnie was under a preexisting duty to dig the basement. b. Earnie wins as this modification is governed by the UCC and consideration is not required to enforce a modification of the agreement. c. Jamie wins as Earnie was not acting in good faith and just wanted to put Jamie in a situation where she didn't have a choice but to agree to more money. d. Earnie wins, as the modification was due to unforeseen difficulties.