The Disclosure Document Provided by the Franchisor

question 14

Multiple Choice

The disclosure document provided by the franchisor:

• A) is required by the FTC.
• B) will state a guaranteed yearly return for the franchisee.
• C) is done on a voluntary basis.
• D) has information that is certified by a CPA and the FTC so it is always a reliable source of data.

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Definitions:

Operating Activities

The day-to-day actions that are involved in running a business, which are reflected in the cash flows from operating activities section of the cash flow statement.

Direct Method

A method for creating a cash flow statement that itemizes the principal categories of gross cash inflows and outflows.

Cash Dividends

A portion of a company's earnings that is paid out to shareholders, typically in the form of cash.

Indirect Method

A approach used in cash flow statements to adjust net income for changes in non-cash accounts to determine net cash from operating activities.