Answer:
a) although both methods result in the same net increase or decrease in cash for the year, net cash flow from operating activities will be different under the two methods
Explanation:
Using the indirect method, computation of cash flow from operating activities begins with net income as shown in the income statement. The FASB also permits both methods but has expressed a preference for the direct method and the direct method shows the specific cash inflow and outflows for each operating activities of the business.
This option that does not align with the differences between the 2 methods is that the cash flow reported under direct and indirect method for operating activities would always remain the same notwithstanding the method used.
The formula is: Assets = Liabilities + Shareholders' Equity. The three components of the basic accounting formula are: Assets. These are the tangible and intangible assets of a business, such as cash, accounts receivable, inventory, and fixed assets
Answer:
1. True.
2. True.
3. True.
4. True.
Explanation:
1. True: A company excludes from the current assets section, the amount of cash restricted for purposes other than payment of current obligations or for use in current operations.
2. True: Land held for speculation is reported in the long-term investment section of the balance sheet because they are fixed assets.
3. True: Financial flexibility measures the ability of an enterprise to take effective actions to alter the amounts and timing of cash flows.
4. True: Companies determine cash provided by operating activities by converting net income on an accrual basis to a cash basis.
Answer:
Extrinsic value is the portion of the worth that has been assigned to an item by external factors.
Hope this helped a little!
Answer: Option A
Explanation: In simple words, goodwill refers to the additional value that an organisation have from its identifiable assets due to its operations over a period of time.
In other words, it can be defined as an intangible asset which an organisation creates over a period of time while establishing the brand image. These assets are not depreciated but are tested for impairment every year. For example brands like apple, Reebok and McDonald have high goodwill in the market which attracts customers towards them
Thus, from the above we can conclude that the correct option is A.
