1.

Which of the following statements about the statement of cash flows is true?

a.	Net income and cash flow are always closely related.
b.	The direct method of converting net income to net cash flow from operations requires that each item on the income statement be converted from an accrual to a cash basis.
c.	The Financial Accounting Standards Board mandates that hospitality businesses use the direct method of converting net income to net cash flow when preparing the statement of cash flows.
d.	With the direct method of determining net cash flows from operations, depreciation expense must be subtracted from net income.

2.

The basic purpose of managerial accounting is to provide information to various management levels in order to:

a.	improve the businesss products and services.
b.	enhance controls.
c.	evaluate accounting records and procedures.
d.	determine the competitive position of the business.