There are two methods for constructing the statement of cash flows: the direct method and the indirect method. What are the similarities and differences between the two methods? Which of the two is most preferred? Which is required by FASB?

Q: Inventory (FIFO method)A company bought 150 units at $30 each and 100 units at $35 each. If it sells…

A: Using FIFO (First-In, First-Out):Sell first 150 units at $30 each: 150 × 30 = $4,500Then sell 30…

Q: Don't answer any optional questions  What does a debit balance in the bank account indicate?A)…

A: A debit balance in a bank account indicates that the business has cash available in the account.…

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A: Step 1: Detailed Explanation of After-Tax IncomeAfter-tax income is the net profit a company earns…

Q: 5. What type of account is "Unearned Revenue"?A) AssetB) LiabilityC) EquityD) Revenueno use ai

A: Answer: B) LiabilityExplanation:Unearned Revenue represents money received before the service or…

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A: Step 1: Detailed Explanation of Net Cash Flow from Operating Activities - Indirect MethodNet cash…

Q: Which financial statement summarizes revenues and expenses?A) Balance SheetB) Cash Flow StatementC)…

A: ✅ Explanation:The **Income Statement** (also known as the **Profit and Loss Statement**) summarizes…

Q: Which of the following is true regarding the accrual basis of Financial accounting? A) Revenues are…

A: Explanation:Under the accrual basis of financial accounting, which is required by GAAP, the key…

Q: Which of the following transactions affects Other + Comprehensive Income rather than net income in…

A: The correct answer is:B) Foreign currency translation adjustmentsExplanation:Other Comprehensive…

Q: In financial accounting, which of the following represents the formula for calculating equity? A)…

A: The correct answer is:C) Equity = Assets - LiabilitiesExplanation:This formula comes from the basic…

Q: Which Financial accounting principle dictates that financial statements should reflect the actual…

A: The correct answer is:A) Historical Cost Principle Explanation:The Historical Cost Principle states…

Q: Operating leverage arises from the presence of: in financial a) Variable costsb) Debt financingc)…

A: The correct answer is: c) Fixed operating costsExplanation:Operating leverage refers to the degree…

Q: When a company pays off a loan, which accounts are affected?A) Cash and Loan PayableB) Cash and…

A: A) Cash and Loan Payable✅ Explanation:Paying off a loan reduces:Cash (asset decreases)Loan Payable…

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A: Step 1: Detailed Explanation of Unit Variable CostUnit Variable Cost refers to the cost incurred by…

Q: Which financial statement shows the financial position on a specific date?a) Income statementb) Cash…

A: Correct answer: d) Balance sheetExplanation:The balance sheet provides a snapshot of a company's…

Q: 1. Risk Assessment and Reflection • . . Begin with a brief self-assessment of your risk tolerance:…

A: This is an "Investment Risk Assessment and Asset Analysis Report" that outlines a self-directed…

Q: What is the contribution margin per unit? Financial accounting

A: Step 1: Detailed Explanation of Contribution Margin per UnitContribution Margin per Unit represents…

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A: Step 1: Detailed Explanation of Labour Efficiency VarianceThe Labour Efficiency Variance measures…

Q: Which of the following is NOT an objective of financial accounting?A) Provide useful financial…

A: Let's look at each option carefully:✅ A) Provide useful financial information to external usersThis…

Q: What does ROI measure?a) Revenue over incomeb) Efficiency of asset usec) Profitability of an…

A: The correct answer is: c) Profitability of an investmentExplanation:ROI (Return on Investment)…

Q: Which element is not considered a component of financial statements in financial accounting prepared…

A: The correct answer is:C) Budgeted Forecast Statements Explanation:Under both GAAP and IFRS, the…

Q: What is the cost of goods sold per unit when using absorption costing? Financial accounting

A: Step 1: Detailed Explanation of Absorption CostingAbsorption costing is a method where all…

Q: Which of these is a contra-revenue account in financial accounting? A) Accumulated Depreciation B)…

A: The correct answer is:B) Sales Returns and Allowances Explanation:A contra-revenue account is used…

Q: A New packaging system at summit works ltd. Financial accounting question

A: Step 1: Detailed Explanation of Present Value (PV)The Present Value (PV) of net cash flows is the…

Q: Which of the following is NOT a part of the financial accounting process? A) Preparing budgets B)…

A: The correct answer is:A) Preparing budgets Explanation:Financial accounting is focused on the…

Q: In which of the following situations is a contingent liability recorded?A) The event is probable,…

A: The correct answer is:A) The event is probable, and the amount can be estimatedExplanation:A…

Q: Which of the following is the best description of "materiality" in accounting?A) The likelihood of a…

A: The correct answer is:C) The ability of an amount to influence the judgment of a financial statement…

Q: What is after taf weighted is 40% financed by risk free. Financial accounting

A: DefinitionsWeighted Average Cost of Capital (WACC): WACC is a financial metric that represents the…

Q: The “acid-test ratio” is another name for: in financial a) Debt-equity ratiob) Return on equityc)…

A: Correct answer: c) Quick ratioExplanation:The acid-test ratio is another name for the quick ratio,…

Q: Which accounting principle assumes a business will continue operating indefinitely?A) Going…

A: Explanation:* **Going Concern** is the accounting principle that assumes a business will continue to…

Q: No A    What is meant by “materiality” in accounting?

A: What Is Meant by "Materiality" in Accounting?Materiality is an accounting principle that states only…

Q: In financial accounting, which of the following represents the formula for calculating equity? A)…

A: The correct answer is:C) Equity = Assets - Liabilities Explanation:In financial accounting, the…

Q: Which of the following is NOT a part of the financial accounting process? A) Preparing budgets B)…

A: The correct answer is:A) Preparing budgetsExplanation:Financial accounting involves recording,…

Q: What does the debt-to-equity ratio measure?A) The amount of debt a company uses compared to equityB)…

A: Correct Answer: A) The amount of debt a company uses compared to equity Explanation (Deep and…

Q: The primary objective of inventory management is to: in financial a) Increase wagesb) Minimize…

A: The right response is c) Reduce the overall cost of inventory.Justification:From a financial…

Q: What does the “P/E ratio” measure? In financial a) Liquidityb) Profitability per expensec) Price…

A: The correct answer is: d) Market price relative to earnings per shareExplanation:The…

Q: In financial accounting, which of the following represents the formula for calculating equity? A)…

A: Long Explanation:In financial accounting, the concept of equity is rooted in the basic accounting…

Q: Financial forecasting is mainly used for: in financial a) Auditingb) Tax planningc) Planning future…

A: The correct answer is: c) Planning future financial performanceExplanation:Financial forecasting…

Q: What possible outcomes may occur or continue to occur if you do not address these widespread…

A: **What is the problem statement of Bombardier Aircraft Company?**Bombardier Aircraft Company has…

Q: What is thecontribution margin per unit? Financial accounting

A: Step 1: Detailed Explanation of Contribution Margin per UnitContribution Margin per Unit is the…

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A: Step 1: Detailed Explanation of Postretirement Benefit ExpensePostretirement benefit expense refers…

Q: Which of the following is true regarding the accrual basis of Financial accounting? A) Revenues are…

A: The correct answer is:C) Revenues and expenses are recognized when earned or incurred, regardless of…

Q: Compute the estimated ending. Financial accounting

A: Step 1: Detailed Explanation of Ending Merchandise InventoryEnding merchandise inventory represents…

Q: Calculate the contribution margin per unit? Determine the break even point in unit's? Financial…

A: Step 1: Detailed Explanation of Contribution Margin and Break-Even PointContribution Margin per Unit…

Q: When a company purchases inventory on credit, what is the effect on the accounting equation?A)…

A: When a company buys inventory on credit, it means it receives inventory (an asset) now but will pay…

Q: Which financial statement shows a company's financial position at a specific point in time?A) Income…

A: let's break it down:A) Income Statement - Shows revenues and expenses over a period (e.g., for the…

Q: Which of the following transactions affects Other + Comprehensive Income rather than net income in…

A: The correct answer is:B) Foreign currency translation adjustmentsExplanation:Other Comprehensive…

Q: 5. What type of account is "Unearned Revenue"?A) AssetB) LiabilityC) EquityD) Revenuei need help

A: **Explanation:****Unearned Revenue** represents money received by a business for goods or services…

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A: Step 1: Detailed Explanation of Invested CapitalInvested Capital is the total amount of money…

Q: The cash conversion cycle measures: in financial a) Time taken to convert cash to profitb) Time…

A: The correct answer is: b) Time between purchasing inventory and receiving cash from…

Q: Financial Accounting Metter solve this one

A: Step 1: Detailed explanation of Predetermined Overhead RateThe predetermined overhead rate is a rate…