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NEW QUESTION 21
Which combination below explains the impact of credit card interest incurred and paid during the period on1) equity on the balance sheet and2) the statement of cash flows?

• A. Option A
• B. Option C
• C. Option D
• D. Option B

Answer: D

Explanation:
Interest incurred is classified as interest expense on the income statement, which in turn reduces equity on the balance sheet by reducing retained earnings. Cash payments for
interest made by an entity that is not a financial institution may be classified on the statement of cash flows as an outflow of cash from operating or financing activities.

NEW QUESTION 22
If a just-in-time purchasing system is successful in reducing the total inventory costs of a manufacturing company, which of the following combinations of cost changes would be most likely to occur?

• A. 0
• B. 1
• C. 2
• D. 3

Answer: B

NEW QUESTION 23
Under the "output" approach, gross domestic product GDP) is measured as:

• A. Non-income charges or allocations + wages + rents + interest.
• B. Consumption expenditures + investment + government purchases + expenditures by foreigners.
• C. Consumption expenditures + investment + government purchases + interest
• D. Non-income charges or allocations + wages + rents + interest + profits.

Answer: B

Explanation:
GDP is the total value of all goods and services produced in the U.S., regardless of the ownership of the means of production. GDP can be measured using an income or output expenditures) approach. The output approach measures the amount spent to purchase the year's total output. Using this approach, GDP is calculated by adding consumption expenditures by households, investment expenditures by businesses, government purchases of goods and services, and expenditures by foreigners.

NEW QUESTION 24
What relationship exists between decentralization and the degree, importance, and range of lower-level decision making?

• A. Direct relationship.
• B. Intrinsic relationship.
• C. Inverse relationship.
• D. Mutually exclusive relationship.

Answer: A

NEW QUESTION 25
......

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