Which accounting methods are preferable for income statements and balance sheets ()
A. LIFO for the balance sheet and FIFO for the income statement.
B. LIFO for both income statements and balance sheets.
C. LIFO for income statements and FIFO for the balance sheet.
Are the following statements about trade debt and customer advances true or false Statement 1: Trade debt is reported in the balance sheet at the present value of the future expected cash flows discounted at the firm’ s weighted-average cost of capital. Statement 2: For analytical purposes, customer advances should be viewed as a prediction of future revenues rather than as an expected cash outflow. Statement 1 Statement 2 ①A. False True ②B. False False ③C. True True
A.
B.
C.
In general, as compared to companies with operating leases, companies with capital leases report :()
A. lower working capital and asset turnover.
B. lower cash flow from operations, higher cash flow from financing.
C. higher debt to equity and return on equity ratios (in the early years)
Which of the following statements about temporary and permanent differences in the analysis of income taxes is FALSE()
An example of a permanent difference is tax-exempt interest revenue.
B. Permanent differences are differences in taxable and pretax income that are never reversed.
C. An example of a temporary difference is the proceeds from life insurance on key employees.