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

question 99

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 owners. Based on this information alone, which of the following is not correct?

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

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Definitions:

Frame Dependence

Refers to the phenomenon where an individual's decision-making is influenced by the way information is presented, rather than just the information itself.

Law of Small Numbers

A cognitive bias that leads people to draw broad conclusions from small data sets or limited observations.

Affect Heuristic

A mental shortcut that allows people to make decisions and solve problems quickly based on their emotions and feelings.

House Money

Refers to the concept of playing with the profits from previous bets rather than one's own capital.