FIN (3) - 1 Accounting profits include noncash revenues(e.g...

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1. Accounting profits include noncash revenues (e.g., prepaid rent) and noncash expenses (e.g., depreciation), whereas cash flows do not include these items. True 2. The income statement identifies the major sources of revenues generated by the firm and the corresponding expenses that were needed to generate those revenues. False 3. The book value of an asset is the historical cost of the asset less the accumulated depreciation. True 4. The current market value of an asset is the amount of cash that a firm would receive for the asset if the asset was sold on the open market. False 5. Cash flows from operating activities relate to the buying and selling of long-term assets. False 6. The generally accepted accounting principles (GAAP) are rules and procedures that define how companies are to maintain financial records and prepare financial reports. 7. On June 23, 2008, Sunshine Cosmetics sold $250,000 worth of its products to Rynex Corporation, with the payment to be made in 90 days on September 20. The firm's accountants should recognize the sale on June 23, 2008 8.
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  • Fall '14
  • Garrett
  • Balance Sheet, Current Assets, Generally Accepted Accounting Principles

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