SRJ Corporation Entered into the Following Transactions: • the Accrual

question 116

Multiple Choice

SRJ Corporation entered into the following transactions: • The accrual of interest expense on a six-month note payable.
• Collected cash for services to be provided within the next six months.
• The reclassification of short-term debt to long-term debt.
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Which of the following statements is correct with respect to determining the net cash flow from operating activities on a statement of cash flows?

• A)The increase in interest payable for the accrual of interest expense is added to net income.
• B)Collecting cash for services to be provided in the future is subtracted from net income.
• C)The reclassification of short-term debt to long-term debt is subtracted from net income.
• D)Collecting cash for services to be provided in the future does not require an adjustment to net income.

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Definitions:

Price-fixing

The practice where businesses conspire to establish prices at a certain level, rather than letting them be determined by free-market forces.

Herfindahl Index

A measure of market concentration that is calculated by squaring the market share of each firm competing in a market and then summing the resulting numbers.

Economic Concentration

The degree to which a small number of firms occupy a large proportion of the market in a particular industry.

Market Shares

The portion of a market controlled by a particular company or product.