List and discuss three ways in which the statement of cash flows helps financial statement users
What will be an ideal response
1. Predict future cash flows—Past cash receipts and payments help predict future cash flows.
2. Evaluate management decisions—Wise investment decisions help the business prosper, while unwise decisions cause the business to have problems. Cash flow information can help investors and creditors to evaluate managers' decisions.
3. Predict ability to pay debts and dividends—Lenders want to know whether they will collect on their loans. Stockholders want dividends on their investments. The statement of cash flows helps make these predictions.
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The journal entry a company records for the issuance of bonds when the contract rate is less than the market ratewould be
a. debit Bonds Payable, credit Cash b. debit Cash and Discount on Bonds Payable, credit Bonds Payable c. debit Cash, credit Premium on Bonds Payable and Bonds Payable d. debit Cash, credit Bonds Payable
A lawsuit where a group of plaintiffs with common claims collectively brings a lawsuit against a defendant is known as a(n) ________.
A. mass action B. class action C. consolidation D. arbitration
Describe a scenario that shows why a company may want to avoid "destroying" a close competitor
What will be an ideal response?
In the comparison of the pay systems of two well-known Japanese companies Toyota and Toshiba, Toyota
A. places greater emphasis on external market rates. B. places less emphasis on individual-based performance pay. C. places less emphasis on individual-based merit pay. D. uses far more levels in its structure.