1. Internet companies that simply act as agent or broker for the transfer of goods must record revenue based on:

a. the cost of the product sold.

b. the fees it charges sellers.

c. the sales price of the product.

d. the gross profit of the product sold.

2. Which of the following statements is not true regarding the cash flow statement?

a. The cash flow statement provides information about changes in all the balance sheet accounts.

b. The change in cash is classified into cash flow from three categories: operating activities, investing activities and financing activities.

c. The cash flow statement generally shows that cash flows and accrual earnings are substantially the same.

d. The cash flow statement explains the causes for year-to-year changes in cash and cash equivalents.