If goods are shipped FOB destination, the seller does not record revenue from the sale until the goods arrive at their destination because the transaction is not complete until that point.
Answer the following statement true (T) or false (F)
True
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1. Free cash flow is calculated by adding cash payments planned for investments in long-term assets and cash dividends to the amount of net cash provided by operating activities. 2. Investors who want to know the amount of cash a company has available for new opportunities, such as expanding into a new sales region, should analyze the company's free cash flow. 3. Free cash flow is the amount of cash available from operating activities before paying for planned investments in long-term assets. 4. Many companies use free cash flow to estimate the amount of cash that would be available for unexpected opportunities.
Which statement best describes the appropriateness of the following product claim in a sales letter? "Viruscan is the best virus defense product available. It offers the most sophisticated and comprehensive protection for your data."
a. The passage is appropriate, since the receiver will likely assume the comparison is with all others, even though research results are not offered. b. The passage is appropriate, since it provides vital comparative information while sparing the receiver of unnecessary and boring details. c. The passage is inappropriate, since the sender has no ethical right to compare his/her product with others. d. The passage is inappropriate unless it is followed up with facts about the comparison.
Which of the following is not an appropriate internal control for cash receipts over the counter?
A) A receipt is issued for each transaction to ensure that each sale is recorded. B) The store clerk deposits the cash in the bank. C) At the end of the day, the manager proves the cash by comparing the cash in the drawer against the machine's record of cash sales. D) The cash draw opens after the store clerk enters a transaction.
When using the rule-of-thumb method for IMC budgeting, prior sales and communication activities are used for guidance.
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