One rationale for the statement of cash flows is to

• A. ensure that the cash account balances at year-end.

• B. reconcile differences between net income and cash receipts and disbursements.

• C. calculate the companys free cash flow.

• D. examine the cash effects of income from discontinued operations, extraordinary items and changes in accounting principles.

One important difference between return on assets (ROA) and return on common shareholders equity (ROCE) is

• A. ROA does not differentiate based on how a company finances its assets; ROCE does.

• B. ROA does not distinguish between the different types of income items, such as income from continuing operations, discontinued operations, extraordinary items and changes in accounting principles; ROCE does.

• C. ROCE does not distinguish between the different types of income items, such as income from continuing operations, discontinued operations, extraordinary items and changes in accounting principles; ROA does.

• D. ROCE does not differentiate based on how a company finances its assets; ROA does.

All of the following are common domestic risks faced by companies except:

• A. recessions

• B. technology

• C. inflation

• D. demographic shifts