Which of the following statements is true?
a. The method of preparing the operating activities section of a statement of cash flows which adjusts net income to remove the effects of deferrals and accruals for revenues and expenses is the direct method.
b. The method of preparing the operating activities section of a statement of cash flows which reports major classes of gross cash receipts and cash payments for revenues and expenses is the indirect method.
c. The FASB prefers the indirect method of preparing the operating activities section of the statement of cash flows.
d. Most companies use the indirect method of preparing the operating activities section of the statement of cash flows.
d
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All adjusting entries should be reversed
Indicate whether the statement is true or false
The term "preferred" comes from the fact that preferred shareholders receive all past (if cumulative) and present dividends before common shareholders can receive any cash dividends—in other words,
their dividend claims are preferred over common stock dividend claims. Indicate whether the statement is true or false.
Davison Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price$95 Units in beginning inventory 0Units produced 5,000Units sold 4,900Units in ending inventory 100 Variable costs per unit: Direct materials$26Direct labor$40Variable manufacturing overhead$1Variable selling and administrative expense$4Fixed costs: Fixed manufacturing overhead$40,000Fixed selling and administrative expense$73,500 What is the total period cost for the month under variable costing?
A. $40,000 B. $113,500 C. $133,100 D. $93,100
Clothing manufacturers typically prefer _____ distribution.
A. selective B. exclusive C. intensive D. patterned E. direct