Craig Corporation's Reported Net Income for 2018 Is Less Than

question 153

Multiple Choice

Craig Corporation's reported net income for 2018 is less than its net cash flow from operating activities.One reason for this could be:

• A)The sale of machinery at a loss in 2018.
• B)An increase in inventory levels during 2018.
• C)The sale of investments at a gain in 2018.
• D)An error in the preparation of the statement of cash flows;net income should be greater than or equal to net cash flow from operating activities.

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Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded by consumers.

Perfectly Inelastic

Perfectly inelastic describes a market scenario where the quantity demanded or supplied does not change regardless of price fluctuations.

Supply

The total amount of a certain good or service that is available for purchase at a particular price level and time.

Perfectly Inelastic

Refers to a market situation where the quantity demanded or supplied does not change regardless of the price level changes.