For Each of the Following Items, Indicate by Using the Appropriate

question 127

Short Answer

For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the direct method.
A. Added in determining cash receipts from customers
B. Deducted in determining cash receipts from customers
C. Added in determining cash payments to suppliers
D. Deducted in determining cash payments to suppliers
E. Cash outflow-investing activity
F. Cash inflow-investing activity
G. Cash outflow-financing activity
H. Cash inflow-financing activity
I. Significant noncash investing and financing activity
J. Is not shown
____ 1. Decrease in accounts payable during a period.
____ 2. Declaration and payment of a cash dividend.
____ 3. Decrease in accounts receivable during a period.
____ 4. Depreciation expense.
____ 5. Conversion of bonds payable into common stock.
____ 6. Decrease in merchandise inventory during a period.
____ 7. Sale of equipment for cash at book value.
____ 8. Issuance of preferred stock for cash.
____ 9. Purchase of land for cash.
____ 10. Loss on sale of a plant asset.

Understand the concept of present intent to contract and its implications for offer validity.

Learn about the enforceability of contracts under the UCC when actions imply acceptance.

Identify the differences between auctions with and without reserve in terms of offer and acceptance.

Recognize the role of specificity and clarity in the formation and enforceability of contracts.

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Definitions:

Hierarchy of Authority

A rank order of authority within an organization, establishing clear paths of responsibility and reporting.

Bureaucrat

An official in a governmental or corporate institution, often perceived as being concerned with procedural correctness at the expense of people's needs.

Department of Justice

The U.S. federal executive department responsible for the enforcement of the law and administration of justice, including federal law enforcement and the conduct of legal affairs.

Legal Business

Activities that are conducted within the boundaries of the law.