LFM Corporation Reported Cost of Goods Sold on Its Income

question 50

Multiple Choice

LFM Corporation reported cost of goods sold on its income statement of $15,000. The following account balances appeared on the company's comparative balance sheet for the same year: The company uses the direct method to determine the net cash provided by operating activities. The cost of goods sold, adjusted to a cash basis, on the company's statement of cash flows for the year would be:

• A)$14,000
• B)$16,000
• C)$10,000
• D)$15,000

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Definitions:

Court

A governmental institution authorized to resolve legal disputes and administer justice.

Negligence

A failure to behave with the level of care that someone of ordinary prudence would have exercised under the same circumstances.

Comparative Negligence

A legal doctrine that apportions damages based on the degree of fault attributable to each party in a lawsuit.

Strict Liability

A principle that holds parties accountable for damages irrespective of preventive measures or caution exercised.