If a Company Reports a Large Amount of Net Income

question 78

Multiple Choice

If a company reports a large amount of net income on its income statement during a year, the firm could have

• A) positive cash flow.
• B) negative cash flow.
• C) zero cash flow.
• D) all of these choices are correct.

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Definitions:

Remedies

Legal means through which a right is enforced or a violation of a right is compensated.

Fraud

Intentional deception made for personal gain or to damage another individual.

Punitive Damages

Punitive damages are monetary compensations awarded in lawsuits, over and above the actual damages, intended to punish the defendant for egregious misconduct and deter future similar acts.

Innocent Misrepresentation

A false statement made by someone who believes it to be true, leading another to enter into a contract or agreement under false pretenses without the intent to deceive.