Nelson Corp $\quad$ $\quad$ $\quad$ $\quad$ $\quad$

question 47

True/False

Nelson Corp. uses the indirect method to prepare the statement of cash flows. Refer to the following section of the comparative balance sheet:
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Nelson Corp..
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Comparative Balance Sheet
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ December 31, 2014 and 2013
$\begin{array}{lrrr} & 2014 & 2013& \text { Increase/decrease } \\\text { Accounts Payable } & \$ 8,000 & \$ 9,000 & \$( 1,000) \\\text { Accrued Liabilities } & 3,000 & 1,500 & (1,500) \\\text { Long-Term Notes Payable } & (56,000) &60,000 & (4,000) \\ \text { Total liabilities} & \$67,000 &\$70,000 & \$(3,500) \\\hline\end{array}$ The change in Accrued Liabilities will be shown as a negative cash flow in the adjustments to Net Income.

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Definitions:

Saving

The process of setting aside a portion of current income for future use, either by depositing money in a bank or purchasing financial instruments.

Benefits-Received Principle

A theory of fairness holding that taxpayers should contribute to government (in the form of taxes) in proportion to the benefits they receive from public expenditures.

Public Goods

Items whose consumption is not depleted by an additional consumer and from which individuals cannot be excluded from using.

Tax Revenue

Revenue earned by governments through the application of taxes.