Suppose a Company Generally Records Revenues and Expenses Before Receiving

question 95

Multiple Choice

Suppose a company generally records revenues and expenses before receiving or making cash payments. Which of the following statements is NOT true?

• A) If sales are falling, net losses could occur even though the company reports net cash inflows from operating activities.
• B) If sales are rising, net profits could occur even though the company reports net cash outflows from operating activities.
• C) Net income and cash flows will always agree because even though revenues and expenses can be recorded in different time periods than their related cash flows the differences will cancel out and the results will be the same.
• D) When the indirect method is used, net cash flows from operating activities includes adjustments for non-cash expenses such as depreciation which would cause net cash from operating activities to be different from net

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Definitions:

Libido

A term often used in psychoanalytic theory to denote the energy associated with the sexual drive and desire.

Id

In psychoanalytic theory, the part of the mind in which innate instinctual impulses and primary processes are manifest.

Superego

The component of the human psyche in Freudian psychoanalytic theory that mediates between the primal desires of the id and the moral standards of the ego, often associated with conscience.

Bar Exam

A professional examination that aspiring lawyers must pass in order to practice law in a given jurisdiction.