Cutting Edge Inc

question 39

Multiple Choice

Cutting Edge Inc. makes and sells tools. One of the tools is believed to be hazardous. The firm may be required to​

• A) ​export the tool and sell it only abroad.
• B) ​increase the price to cover the cost of any injuries or damage.
• C) ​reduce the price to indicate the hazard to consumers.
• D) ​remove the tool from the market.

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Definitions:

Long-Term Investments

Assets that a company intends to hold for more than one year, such as stocks, bonds, or real estate.

Statement of Cash Flows

A financial report detailing the impact of variations in balance sheet accounts and income on cash and cash equivalents.

Direct Method

An accounting method used in the cash flow statement to show the specific sources of operating cash receipts and payments, contrasting with the indirect method.

Investing Activities

Transactions involving the purchase and sale of long-term assets and investments, a component of a company's cash flow statement.