During Year 7, Frank Company Had a Net Increase in Accounts

question 31

Multiple Choice

During Year 7, Frank Company had a net increase in accounts receivable of $10,000.The T-account work sheet for preparing the statement of cash flows

• A)adds the increase in accounts receivable in deriving cash flow from operating activities.
• B)subtracts the increase in accounts receivable in deriving cash flow from operations.
• C)adds the increase in accounts receivable in deriving cash flow from financing activities.
• D)subtracts the increase in accounts receivable in deriving cash flow from financing activities.
• E)subtracts the increase in accounts receivable in deriving cash flow from investing activities.

Understand the principles of imputed interest and its applicability in financial transactions.

Recognize the GAAP requirements for recording accounts and notes receivable.

Identify indicators of aggressive revenue recognition policies through the analysis of sales and receivables growth.

Comprehend the options and implications of the fair value measurement for financial instruments.

---

Definitions:

Migration Costs

Expenses and sacrifices associated with moving from one location to another, which can include monetary costs, emotional strain, and time.

Substitute Resources

Resources or inputs that can be used in place of each other in the production process.

Inelastic

Describes a situation where a change in price leads to a relatively smaller change in the quantity demanded or supplied.

Remittances

Money sent by migrants back to their home countries, often to support family members financially.