I need an explanation for this Accounting question to help me study.
6. Do you agree with the following statement, why or why not: A sale on account only impacts the income statement and no other statement.
7. Do you agree with the following statement, why or why not: A higher asset turnover ratio implies reduced efficiency.
8. Do you agree with the following statement: When prices are rising, accounting for inventory using the LIFO cost flow method will lead to higher net income but lower ending inventory. Explain.
9. Do you agree with the following statement, why or why not: Equipment in good working order may be retired due to obsolescence.
10. Do you agree with the following statement, why or why not: under the much more common indirect method, net cash flow from operating activities is computed indirectly by beginning with net income, which appears on the income statement and adjusting it for accruals and cash flows.
11. Name and explain 4 ways that management decisions can affect the financial statements? (Ex. the cookie jar)
12. We know that cash inflows and outflows associated with the acquisition and sales of assets are included in the investing section of the cash flow statement. How are changes in the balance sheet values of assets reflected on the income statement?
13. Why are shareholders, investors, creditors, auditors, and managers interested in the nature and condition of a company’s producing assets?
14. A low “Producing asset turnover ratio” indicates what?
15. Explain the difference between a “betterment” and “maintenance” and explain the accounting for each.