During Year 2, Chico Company Earned $1,950 of Cash Revenue

question 63

Multiple Choice

During Year 2, Chico Company earned $1,950 of cash revenue, paid $1,600 of cash expenses, and paid a $150 cash dividend to its stockholders. Based on this information alone, which of the following statements is not true?

• A) Net income amounted to $350.
• B) Total assets increased by $200.
• C) Cash inflow from operating activities was $350.
• D) Cash outflow from financing activities was $200.

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Definitions:

Wages

Payments made to employees based on the amount of time worked or the level of output produced.

Output

The total amount of goods or services produced by a company, industry, or economy.

Prospective Sunk Costs

Future costs that, once incurred, cannot be recovered and should not influence current decision-making processes.

Economic Decision-Making

The process of choosing among alternatives to maximize outcomes based on objectives and constraints.