A Statement of Cash Flows Is Being Prepared Using Accrual

question 10

Multiple Choice

A statement of cash flows is being prepared using accrual based information. Using the direct write-off method to calculate cash receipts from customers, bad debts written off is:

• A) not adjusted.
• B) shown as cash outgoing.
• C) added to accrual-basis revenue.
• D) subtracted from accrual-basis revenue.

Understand the ethical significance of assessing the effects of actions in determining their moral worth.

Associate Bentham and Mill's utilitarian ethics with the valuation of pleasure and its role in ethical decision-making.

Analyze utilitarian perspectives on public policy and punishment, focusing on the conditions under which punishment is considered justified.

Understand the concept of moral obligations being independent of personal desires.

---

Definitions:

Income Statement

A financial statement that shows a company’s revenues and expenses over a specific period, leading to the net income or loss for the period.

Treasury Stock

An alternative term for treasury shares, referring to stocks that a company has repurchased and holds, reducing the amount of outstanding stock on the market.

Closing Entries

Made at the end of the accounting period to transfer balances in temporary (income statement) accounts to Retained Earnings and to establish a zero balance in each of the temporary accounts for beginning the next accounting period.

Account Balances

The total amount of money in an account at a certain point in time, which can represent assets or liabilities depending on the account type.