An agency problem occurs when a firm selects an ineffective marketing, advertising, and PR firm to represent them

Judd, Inc., owns 35% of Cosby Corporation. During the calendar year 2012, Cosby had net earnings of $300,000 and paid dividends of $30,000. Judd mistakenly recorded these transactions using the fair value method rather than the equity method of accounting. What effect would this have on the investment account, net income, and retained earnings, respectively?

a. Understate, overstate, overstate b. Overstate, understate, understate c. Overstate, overstate, overstate d. Understate, understate, understate

What type of activity is the purchase of equipment for cash?

A. Operating activity B. Investing activity C. Financing activity D. A non-cash investing activity that goes into a separate schedule of the notes of the statement of cash flows