Which of the Following Statements Is CORRECT

question 27

Multiple Choice

Which of the following statements is CORRECT?

• A) Depreciation and amortization are not cash charges, so neither of them has an effect on a firm's reported profits.
• B) The more depreciation a firm reports, the higher its tax bill, other things held constant.
• C) People sometimes talk about the firm's net cash provided (used) by operations, which is shown as the lowest entry on the income statement, hence it is often called "the bottom line."
• D) Depreciation reduces a firm's cash balance, so an increase in depreciation would normally lead to a reduction in the firm's net cash flow.
• E) Net cash provided (used) by operations is often defined as follows:
• Net cash flow provided (used) by operations = Net Income + Noncash Adjustments + Working Capital Adjustments.

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Definitions:

Supply Chain

The network of all the individuals, organizations, resources, activities, and technology involved in the creation and sale of a product, from the delivery of source materials from the supplier to the manufacturer, and on to its eventual delivery to the end user.

Landfill

A site for the disposal of waste materials by burial and is the oldest form of waste treatment.

Direct Emissions

Emissions of greenhouse gases that are directly produced by a source, such as a factory or vehicle, as part of its operations.

Reporting Entity

A reporting entity refers to any business, organization, or unit that has legal and economic responsibilities to report its financial and operational data.