Suppose a Company Generally Records Revenues and Expenses Before Receiving

question 52

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 above.

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Definitions:

Cartel

Market in which some or all firms explicitly collude, coordinating prices and output levels to maximize joint profits.

Price Strategies

Techniques used by companies to price their products or services with a view to maximizing profits or market share.

Marginal Revenue Function

The rate at which total revenue changes with respect to the output quantity change.

Marginal Costs

The added cost that comes from producing an additional unit of a product or service.