Which of the following statement is incorrectregarding the investing activities section of the statement of cashflows?

Investing activities deal with long-term liabilities (debt) andequity accounts.

Increases in long-term asset balances suggest cash outflows topurchase assets.

Decreases in long term asset balances suggest cash inflows fromselling assets.

Investing activities involve cash purchases and cash disposalsof long-term assets.

Which of the following statements iscorrect?

Investors need to understand that the value of a company'searnings per share is affected by its choices of accountingprinciples and assumptions.

Earnings per share is calculated for a company's preferredstock.

The most widely quoted measure of a company's earningsperformance is return on equity.

The book value per share measures the market value of acorporation's stock.

Which of the following statements is incorrectregarding preparing a statement of cash flows using the directmethod?

The direct method shows adjustments to net income.

The direct method shows the specific sources and uses of cashthat are associated with operating activities.

Noncash expenses, gains, and losses are not used in thedetermination of net cash flow from operating activities.

A majority of companies use the indirect method rather than thedirect method.

Which of the following statements regarding a process costsystem is false?

Use of a process cost system would be appropriate for a companythat manufactures luxury yachts.

Unit costs are computed for each department.

The number of equivalent whole units for a period takes intoaccount the stage of completion of ending work in processinventory.

Unit cost is determined for a designated period of time.

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Bunny Greenfelder
Bunny GreenfelderLv2
28 Sep 2019

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