Which of the Following Statements Is FALSE

question 64

Multiple Choice

Which of the following statements is FALSE?

• A)The income statement is put together at a specific point in time (end of a business quarter,or business year)and so the sale could be in one period and the cash received in another period.
• B)The income statement contains the set of expenses associated with the products or services sold during the current operating period,with those expenses not associated with current cash flow labeled as non-cash expense items.
• C)In almost all circumstances depreciation is a current expense of a cash outflow in the current period.
• D)Companies depreciate fixed assets (such as office furniture,equipment,machinery,and buildings)over an assigned time period,but the initial cash outlay for the fixed asset typically occurs at the time the asset is acquired by the firm.

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Definitions:

Unlimited Liability

The legal obligation of business owners to bear any and all debts of the business with their personal assets.

Personal Assets

Individual possessions or properties, including money, that belong to a person, not related to business assets.

Sole Proprietor

A type of business entity owned and operated by a single individual, where there is no legal distinction between the owner and the business.

Personal Fortune

A person's net worth comprised of assets, cash, and investments minus any liabilities.