Suppose a Company Generally Records Revenues and Expenses Before Receiving

question 107

Multiple Choice

Suppose a company generally records revenues and expenses before receiving or making cash payments.Which of the following statements is then true?

• A)If sales are falling,net losses could occur even though the company reports net cash inflows from operating activities.
• B)If sales are rising,net profits could occur even though the company reports net cash outflows from operating activities.
• C)Net income and cash flows will not always agree because revenues and expenses can be recorded in different time periods than their related cash flows.
• D)All of the answers are acceptable.

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Definitions:

Price

The amount of money expected, required, or given in payment for something.

Delivery

The process of transporting goods from one place to another or the act of transferring the possession of a legal instrument.

Valid Offer

A legally binding proposal made by one party to another to form a contract, requiring clear terms, intention, and communication.

Knowledge

The understanding, awareness, or familiarity gained through education or experience.