Which One of the Following Sentences Is Correct About a Manufacturing

question 82

Multiple Choice

Which one of the following sentences is correct about a manufacturing firm with seasonal sales?

• A) The cash flows for the fixed expenses tend to remain relatively stable from one quarter to the next.
• B) Purchases of raw materials are normally paid for at the time of purchase.
• C) The primary suppliers to the firm are normally paid 30 days prior to supplying their goods to the firm.
• D) Capital expenditures tend to be relatively constant throughout the course of a year.
• E) The total cash disbursements tend to be relatively constant each quarter even though the cash collections vary considerably.

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Definitions:

Income Taxes

Taxes levied by governments on the income generated by individuals or entities, which can vary based on the income amount and the taxpayer's characteristics.

Personal Income Taxes

Taxes levied on individuals or households based on their income level, contributing to government revenue.

Dividends

Dividends are payments made by a corporation to its shareholders, usually derived from the company's profits, as a way to distribute a portion of the earnings back to investors.

Double Taxation

A taxation principle referring to income taxes paid twice on the same source of earned income, often seen in international business or when corporate income is taxed both at the corporate and personal levels.