Reference no: EM132794783

Problem 1: How are the cash flow effects from the purchase and sale of intangible assets reported on a statement of cash flows?

a. As operating activities
b. As financing activities
c. As investing activities
d. They are not reported on a statement of cash flows.

Problem 2: Many companies use accelerated depreciation for

a. tax purposes because it results in a larger net income in the early years of a plant asset's life.
b. financial reporting purposes because depreciation is not allowed for tax purposes.
c. tax purposes because of a desire to report higher expenses in early years in order to pay lower taxes.
d. financial reporting purposes and a different method for tax purposes.