LSAT 120 – Section 1 – Question 11

LSAT 120 - Section 1 - Question 11

October 2005

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Question
QuickView		 Type Tags Answer
Choices		 Curve Question
Difficulty		 Psg/Game/S
Difficulty		 Explanation
PT120 S1 Q11
+LR
Strengthen +Streng
Link Assumption +LinkA
A
2%
156
B
2%
151
C
1%
153
D
89%
163
E
7%
157
129
140
150
 +Easier 145.819 +SubsectionMedium

In contemplating major purchases, businesses often consider only whether there is enough money left from monthly revenues after paying monthly expenses to cover the cost of the purchase. But many expenses do not occur monthly; taking into account only monthly expenses can cause a business to overexpand. So the use of a cash-flow statement is critical for all businesses.

Summarize Argument
The author concludes that businesses must use a cash-flow statement. This is because expenses don’t always occur monthly, and only taking into account monthly expenses can cause businesses to overexpand.

Notable Assumptions
The author assumes that a cash-flow statement accounts for expenses that don’t occur monthly.

A
Only a cash-flow statement can accurately document all monthly expenses.
We need to know about non-monthly expenses.
B
Any business that has overexpanded can benefit from the use of a cash-flow statement.
We need to know why cash-flow statements are critical in the first place. Do they account for non-monthly expenses?
C
When a business documents only monthly expenses it also documents only monthly revenue.
We don’t care about revenue. We care about documenting non-monthly expenses.
D
A cash-flow statement is the only way to track both monthly expenses and expenses that are not monthly.
A cash-flow statement accounts for monthly and non-monthly expenses. This strengthens the author’s claim that a cash-flow statement solves the problem of accounting only for monthly expenses.
E
When a business takes into account all expenses, not just monthly ones, it can make better decisions.
Do cash-flow statements allow businesses to do this? We don’t know.

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LSAT PrepTest 120 Explanations

Section 1 - Logical Reasoning

Section 2 - Reading Comprehension

Section 3 - Logical Reasoning

Section 4 - Logical Reasoning

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