When Preparing a Statement of Changes in Financial Position Using

question 38

Multiple Choice

When preparing a statement of changes in financial position using the cash basis for defining funds, an increase in ending inventory over beginning inventory will result in an adjustment to reported net earnings because

• A) Funds were increased since inventory is a current asset
• B) The net increase in inventory reduced cost of goods sold but represents an assumed use of cash
• C) Inventory is an expense deducted in computing net earnings, but is not a use of funds
• D) All changes in noncash accounts must be disclosed under the all financial resources concept

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Definitions:

Short-Term Consequences

Effects or outcomes of an action, decision, or event that appear or are felt immediately or within a relatively brief period after.

Impact of Music

The effect music has on various aspects of society and individuals, including emotional well-being, cultural development, and social cohesion.

Young People

Individuals in their youth, typically referring to those within the teenage years up to young adulthood, characterized by development, learning, and transition into various societal roles.

1960s

A decade marked by significant cultural, social, and political change worldwide, including the civil rights movement, counterculture, and major shifts in attitudes toward authority.