In a customs union, a common currency is adopted
Indicate whether the statement is true or false.
FALSE
A customs union eliminates trade barriers between member countries and adopts a common external trade policy. Establishment of a common external trade policy necessitates significant administrative machinery to oversee trade relations with nonmembers. It is only at the level of economic union that a common currency is required.
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Which one of the following is not a cost element in manufacturing a product?
a. Manufacturing overhead b. Direct materials c. Office salaries d. Direct labor
The balance sheet indicates that Paul Corporation owns 40 percent of the common stock of Sun Company. During Year 2, Sun Company earned $12,000 and paid $4,000 of dividends. Paul Corporation made the following entries on its books during the year. Investment in Company B . . . . . . . . . . . . . . . . . . . . . 4,800 Equity in Earnings of Affiliate . . . . . . . . . . . . . . . . . . . . . . .
. . 4,800 Net income of Paul Corporation includes $4,800 of equity income. It received only $1,600 of cash. The T-account work sheet for preparing the statement of cash flows a. adds $3,200 to net income in deriving cash from operations. b. subtracts $1,600 from net income in deriving cash from operations. c. adds $1,600 to net income in deriving cash from operations. d. subtracts $3,200 from net income in deriving cash from operations. e. adds $3,200 to retained earnings in deriving cash from investing.