Consider How Each of the Transactions Listed Below Affect Net

question 69

Multiple Choice

Consider how each of the transactions listed below affect net income reported on the income statement and the net cash flows from operating activities reported on the statement of cash flows.Which transaction(s) would affect the income statement in a different period from the statement of cash flows?

• A)Recognized depreciation expense on equipment.
• B)Incurred operating expenses on account.
• C)Paid interest that was accrued in a prior year.
• D)All of these answer choices would affect the income statement in a different period from the statement of cash flows.

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Definitions:

Accounts Payable

Money owed by a company to its creditors for goods or services that have been delivered but not yet paid for.

Shortage Costs

Expenses incurred when demand exceeds supply, including lost sales and the cost of expedited orders or production to meet demand.

Restrictive Financing Policy

A financial strategy that involves maintaining lower levels of current assets or using more short-term financing to fund those assets, aiming to reduce costs but increase risk.