Indicate Whether Each of the Following Statements Is True or False

question 145

True/False

Indicate whether each of the following statements is true or false.
a)________ It is possible for a growing business to have substantial earnings, but yet be short of cash.b)________ It is possible for a well-established business to report large operating losses, but have positive cash flow from operating activities.c)________ A merchandising firm adding new stores must report the additional inventory purchases as investing activities.d)________ When equipment is purchased to replace old equipment, the transaction is reported as an operating activity.e)________ FASB requires companies to disclose significant investing and financing activities even if these transactions do not affect cash.

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Definitions:

Constrained Resource

A factor that limits the output of a process or the achievement of organizational goals, often critical in determining maximum production or service levels.

Special Order

An order for a product or service that is not part of the company's usual offerings or produced under unique specifications, often at a negotiated price.

Minimum Price

The lowest price at which a product or service can be sold, often set to cover costs or comply with legal requirements.

Machine Hours

A measure of the operating time of machinery used in production, commonly applied in calculating depreciation or allocating overhead.