If a fixed asset is discarded, which of the following statements is always true? OOOOO The difference between the remaining book value and the cash received is reported as either a gain or a loss on the income statement. The cost of the asset and the related accumulated deprecation are removed from the accounting records. The remaining book value is reported as a loss on the balance sheet. The asset's book value equals its residual value. More than one of the above statements is always true. Which of the following statements is TRUE regarding the cash metric-based analysis discussed in Chapter 5? Including cash equivalents in the calculation of the ratio of cash to monthly cash expenses typically reduces the ratio. If a company reports positive cash flows from operating activities, it is said to have a monthly cash burn. Beyond the time period indicated by the ratio of cash to monthly cash expenses, a company would always report a net loss on its income statement. For purposes of cash metric-based analysis, the monthly cash expenses are calculated by taking total cash expenses reported on the income statement and dividing by 12. The ratio of cash to monthly cash expenses indicates how long a company could operate on its available cash. Which of the following companies would be the least likely to use a job order costing system? OOOOO Avatar, Inc., a builder specializing in martial arts studio construction built to customer specifications. Rosie the Robot Company, a manufacturer of space age cleaning robots built to customer specifications. Sweetwater, Inc., a manufacturer of mass produced blueberry based beverages. The Wright Flight Company, a manufacturer of drones produced in small batches. The Black Bear Trail, LLC, a builder speciailing in one-of-a-kind premade Pacific Northwest cabins. Which of the following statement is incorrect? Operating income is equal to gross profit minus selling, general, and administrative expenses. The income statement for a merchandiser differs in form from the income statement for a service company. Merchandise inventory is considered a current asset. The operating cycle for a merchandiser includes a purchasing element. When merchandise is purchased for resell to customers, cost of goods sold is recorded. Which of the following statements is correct? OOOOO Dividends affect both the income statement and the balance sheet of a company. Dividends are paid on the amount of shares issued. A company must have sufficient retained earnings and cash for the board of directors to declare a cash dividend. Any amount recieved for stock over its par value is considered additional paid in capital and is reported on the income statement. If a company has a single class of stock, it is referred to as treasury stock