标题: mock AM, #40 why is C incorrect [打印本页] 作者: prashantsahni 时间: 2013-4-8 17:00 标题: mock AM, #40 why is C incorrect
#40 Which of the following most likely increased both profitability and CFO
A - defrred revenue recognition
B- capitalization of interestcosts
C extension of payment terms with suppliers
the answer is B, but it seems to me C is also correct
(1) extension of payment terms lower expenses in current term higher NI higher profitability
(2) extension of payment terms - lower expenses in current term lower cash outflows higher CFO作者: Rasec 时间: 2013-4-8 17:01
Its says ‘most likely’, and I dont think extension of payment terms with suppliers has any effect on your COGS, as this is accounted for using accrual accounting, and so weather you paid them or not doesnt matter, COGS is based on the products sold, and the cost of these products作者: PieMan 时间: 2013-4-8 17:01
your explanation makes sense - thank you for replying
