On the Statement of Cash Flows, a gain on the sale of property, plant and equipment is subtracted in the operating section. This is because:

A)This gain does not represent the amount of cash received from selling the property, plant and equipment.

b) The company has not received cash for the property, plant and equipment.

c) This gain has reduced cash.

d) This gain cannot be recognized due to conservatism.

A company uses the percentage of sales method to estimate the bad debt expense. Credit sales revenue is $14,500,000 and cash sales revenue is $7,500,000. The company uses an estimate of 3% of credit sales revenue to estimate bad debts expense. There already is a credit balance of $200,000 in the Allowance account. The journal entry to record bad debt expense at includes:

a) A credit to Allowance for Doubtful Accounts for $235,000

b) A debit to Bad Debt Expense for $435,000

c) A debit to Bad Debt Expense for $660,000

d) A credit to Allowance for Doubtful Accounts for $460,000

General Mills shows a large balance in the account, Goodwill. Which statement is false about General Mills Goodwill?

a)The companies acquired by General Mills have products or processes that it wanted.

b)The amounts General Mills paid for other companies exceeded the values of their identifiable net assets.

c)General Mills was acquired by another company and turned into a subsidiary.

d) General Mills has acquired other companies.