Craig Corporation's Reported Net Income for 2009 Is Less Than

question 42

Multiple Choice

Craig Corporation's reported net income for 2009 is less than its net cash flow from operating activities. One reason for this could be:

• A) The sale of machinery at a loss in 2009.
• B) An increase in inventory levels during 2009.
• C) The sale of investments at a gain in 2009.
• D) An error in the preparation of the statement of cash flows; net income should be greater than or equal to net cash flow from operating activities.

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Definitions:

Long-Run Equilibrium

A state in which all factors of production and costs are variable, allowing firms to make adjustments to achieve the optimal scale of operation, leading to zero economic profit in competitive markets.

Club Meeting

A scheduled gathering of members of a specific club or organization.

Attendance

The act of being present at a particular place or event, often measured to assess participation or interest.

Number

A mathematical object used to count, measure, and label.