Which of the Following Is NOT a Reason That the Income

question 76

Multiple Choice

Which of the following is NOT a reason that the income statement does not accurately indicate how much cash a firm has earned?

• A) It includes entries for the depreciation of assets.
• B) It does not include entries for expenditures on inventory.
• C) It does not include entries for collection of money from account receivables.
• D) It includes cash inflows from services rendered.

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Definitions:

Opportunity Cost

The next best alternative forgone as the result of making a decision.

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Unattainable Production

A situation where the level of production desired cannot be achieved with the available resources or technology.