Two methods are available to prepare the operating activities section of a statement of cash flows. Which of the following statements regarding these two methods is false?
a. If a company uses the indirect method, it must separately disclose the cash payments made for interest and income taxes.
b. If a company uses the direct method, it must present a separate schedule which reconciles net income to net cash from operating activities.
c. Advocates of the direct method believe that the indirect method reveals too much by telling readers gross amounts of cash receipts and cash payments from operations.
d. The FASB prefers the direct method, while most companies use the indirect method in practice.
c
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The task of any business is to ________
A) create customer needs B) differentiate in terms of cost of production C) deliver customer value at a profit D) reduce competition E) communicate similar value as provided by competitors
Consider the following scenario. A researcher believes that although there is a violation of the right to privacy among shoppers who are observed without their knowledge (the cost), there is a benefit if the company learns how to market goods more
efficiently, thus reducing long-term marketing costs. This researcher is most likely a: A) teleologist B) deontologist C) sociologist D) demonologist E) deaconologist
Payroll taxes levied against employers become an employer liability at the time the employee wages are incurred
Indicate whether the statement is true or false
Comparison of the degree of operating leverage of two firms is valid only when the base level of sales used for each firm is the same
Indicate whether the statement is true or false