Use the Information Below to Answer the Following Questions

question 19

Multiple Choice

Use the information below to answer the following questions:
Leslie Ltd has found an error in its revenue account: an invoice for $3000 was recorded as revenue in 2011 when it should have been recorded in 2012. The company’s income tax rate is 40% and there was no corresponding error in cost of goods sold.
-What is the effect of the error on 2011 cash from operations?

• A) There is no cash effect.
• B) It is $1200 too high.
• C) It is $1800 too high.
• D) It is $3000 too high.

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Definitions:

Hypothesis

A proposed explanation for a phenomenon, which can be tested through experimentation and research.

Positive Correlation

A connection between two variables where both variables shift in tandem.

Independent Variables

In experimental design, the variables that are manipulated by the researcher to observe their effect on dependent variables.

Opposite Direction

A term indicating a movement, action, or trend that goes in the reverse direction of a previously established pattern or expectation.