Financial Accounting ch. 11 & 12
Rate this data set:

Under the corporate form of business organization A) a stockholder is personally liable for the debts of the corporation.B) stockholders' acts can bind the corporation even though the stockholders have not been appointed as agents of the corporation.n.>>C) the corporation's life is stipulated in its charter.D) stockholders wishing to sell their corporation shares must get the approval of other stockholders.
Stockholders of a corporation directly elect A) the president of the corporation.>>B) the board of directors.C) the treasurer of the corporation.D) all of the employees of the corporation.
Those most responsible for the major policy decisions of a corporation are the A) stockholders.>>B) board of directors.C) management.D) employees.
The chief accounting officer in a company is known as the >>A) controller.B) treasurer.C) vice-president.D) president.
Which one of the following would not be considered an advantage of the corporate form of organization? A) Limited liability of stockholdersB) Separate legal existenceC) Continuous life>>D) Government regulation
The two ways that a corporation can be classified by ownership are >>A) publicly held and privately held.B) stock and non-stock.C) inside and outside.D) majority and minority.
Which of the following is not true of a corporation? A) It may buy, own, and sell property.B) It may sue and be sued.>>C) The acts of its owners bind the corporation.D) It may enter into binding legal contracts in its own name.
Allen Sutton has invested $600,000 in a privately held family corporation. The corporation does not do well and must declare bankruptcy. What amount does Sutton stand to lose? >>A) Up to his total investment of $600,000B) ZeroC) The $600,000 plus any personal assets the creditors demandD) $400,000
Which of the following statements reflects the transferability of ownership rights in a corporation? A) If a stockholder decides to transfer ownership, he must transfer all of his shares.>>B) A stockholder may dispose of part or all of his shares.C) A stockholder must obtain permission of the board of directors before selling shares.D) A stockholder must obtain permission from at least three other stockholders before selling shares.
A corporate board of directors does not generally A) select officers.B) formulate operating policies.C) declare dividends.>>D) execute policy.
The ability of a corporation to obtain capital is >>A) enhanced because of limited liability and ease of share transferability.B) less than a partnership.C) restricted because of the limited life of the corporation.D) about the same as a partnership.
Which of the following statements concerning taxation is accurate? A) Partnerships pay state income taxes but not federal income taxes.B) Corporations pay federal income taxes but not state income taxes.>>C) Corporations pay federal and state income taxes.D) Only the owners must pay taxes on corporate income.
Which of the following statements is not considered a disadvantage of the corporate form of organization? A) Additional taxesB) Government regulations>>C) Limited liability of stockholdersD) Separation of ownership and management
A disadvantage of the corporate form of organization is A) professional management.>>B) tax treatment.C) ease of transfer of ownership.D) lack of mutual agency.
A disadvantage of the corporate form of business is A) its status as a separate legal entity.B) continuous existence.>>C) government regulation.D) ease of transfer of ownership.
Which of the following phrases is not descriptive of the corporate form of business? A) Professional managementB) Double taxation on distributed earnings>>C) Unlimited liabilityD) Continuous existence
Which one of the following is not an ownership right of a stockholder in a corporation? A) To vote in the election of directors>>B) To declare dividends on the common stockC) To share in assets upon liquidationD) To share in corporate earnings
If no-par stock is issued without a stated value, then A) the par value is automatically $1 per share.>>B) the entire proceeds are considered to be legal capital.C) there is no legal capital.D) the corporation is automatically in violation of its state charter.
If a stockholder cannot attend a stockholders' meeting, he may delegate his voting rights by means of a(n) A) absentee ballot.>>B) proxy.C) certified letter.D) telegram.
The term residual claim refers to a stockholder's right to A) receive dividends.>>B) share in assets upon liquidation.C) acquire additional shares when offered.D) exercise a proxy vote.
Which of the following factors does not affect the initial market price of a stock? A) The company's anticipated future earnings>>B) The par value of the stockC) The current state of the economyD) The expected dividend rate per share
If an investment firm underwrites a stock issue, the A) risk of being unable to sell the shares stays with the issuing corporation.>>B) corporation obtains cash immediately from the investment firm.C) investment firm has guaranteed profits on the sale of the stock.D) issuance of stock is likely to be directly to creditors.
The par value of a stock >>A) is legally significant.B) reflects the most recent market price.C) is selected by the SEC.D) is indicative of the worth of the stock.
Par value A) represents what a share of stock is worth.B) represents the original selling price for a share of stock.C) is established for a share of stock after it is issued.>>D) is the value assigned per share in the corporate charter.
The term legal capital is a descriptive term for A) stockholders' equity.>>B) par value.C) residual equity.D) market value.
A corporation has the following account balances: Common Stock, $1 par value, $40,000; Paid-in Capital in Excess of Par Value, $1,800,000. Based on this information, the A) legal capital is $1,840,000.>>B) number of shares issued is 40,000.C) number of shares outstanding is 1,840,000.D) average price per share issued is $4.60.
The authorized stock of a corporation A) only reflects the initial capital needs of the company.B) is indicated in its by-laws.>>C) is indicated in its charter.D) must be recorded in a formal accounting entry.
The amount of stock that may be issued according to the corporation's charter is referred to as the >>A) authorized stock.B) issued stock.C) unissued stock.D) outstanding stock.
If Morgan Company issues 2,000 shares of $5 par value common stock for $140,000, the account A) Common Stock will be credited for $140,000.B) Paid-in Capital in Excess of Par Value will be credited for $10,000.>>C) Paid-in Capital in Excess of Par Value will be credited for $130,000.D) Cash will be debited for $130,000.
New Corp. issues 1,000 shares of $10 par value common stock at $14 per share. When the transaction is recorded, credits are made to: A) Common Stock $10,000 and Paid-in Capital in Excess of Stated Value $4,000.B) Common Stock $14,000.>>C) Common Stock $10,000 and Paid-in Capital in Excess of Par Value $4,000.D) Common Stock $10,000 and Retained Earnings $4,000.
If Kiner Company issues 1,000 shares of $5 par value common stock for $70,000, the account >>A) Common Stock will be credited for $5,000.B) Paid-in Capital in Excess of Par Value will be credited for $5,000.C) Paid-in Capital in Excess of Par Value will be credited for $70,000.D) Cash will be debited for $65,000.
If common stock is issued for an amount greater than par value, the excess should be credited to A) Cash.B) Retained Earnings.>>C) Paid-in Capital in Excess of Par Value.D) Legal Capital.
Paid-in Capital in Excess of Par Value A) is credited when no-par stock does not have a stated value.>>B) is reported as part of paid-in capital on the balance sheet.C) represents the amount of legal capital.D) normally has a debit balance.
The Paid-in Capital in Excess of Par Value is increased in the accounting records when A) the number of shares issued exceeds par value.B) the stated value of capital stock is greater than the par value.C) the market value of the stock rises above par value.>>D) capital stock is issued at an amount greater than par value.
Which of the following represents the largest number of common shares? A) Treasury sharesB) Issued sharesC) Outstanding shares>>D) Authorized shares
Jansen Packaging Corporation began business in 2007 by issuing 40,000 shares of $5 par common stock for $8 per share and 10,000 shares of 6%, $10 par preferred stock for par. At year end, the common stock had a market value of $10. On its December 31, 2007 balance sheet, Jansen Packaging would report A) Common Stock of $400,000.>>B) Common Stock of $200,000.C) Common Stock of $320,000.D) Paid-In Capital of $300,000.
Kim, Inc. issued 5,000 shares of stock at a stated value of $10/share. The total issue of stock sold for $15/share. The journal entry to record this transaction would include a A) debit to Cash for $50,000.>>B) credit to Common Stock for $50,000.C) credit to Paid-in Capital in Excess of Par Value for $25,000.D) credit to Common Stock for $75,000.
Foley Manufacturing Corporation purchased 3,000 shares of its own previously issued $10 par common stock for $69,000. As a result of this event, A) Foley's Common Stock account decreased $30,000.>>B) Foley's total stockholders' equity decreased $69,000.C) Foley's Paid-in Capital in Excess of Par Value account decreased $39,000.D) All of the above.
Treasury stock is A) stock issued by the U.S. Treasury Department.B) stock purchased by a corporation and held as an investment in its treasury.C) corporate stock issued by the treasurer of a company.>>D) a corporation's own stock, which has been reacquired and held for future use.
The acquisition of treasury stock by a corporation A) increases its total assets and total stockholders' equity.>>B) decreases its total assets and total stockholders' equity.C) has no effect on total assets and total stockholders' equity.D) requires that a gain or loss be recognized on the income statement.
Treasury stock should be reported in the financial statements of a corporation as a(n) A) investment.B) liability.C) deduction from total paid-in capital.>>D) deduction from total paid-in capital and retained earnings.
Treasury Stock is a(n) A) contra asset account.B) retained earnings account.C) asset account.>>D) contra stockholders' equity account.
Treasury shares plus outstanding shares equal A) authorized stock.>>B) issued stock.C) unissued stock.D) distributable stock.
Which of the following is not a right or preference associated with preferred stock? >>A) The right to voteB) First claim to dividendsC) Preference to corporate assets in case of liquidationD) To receive dividends in arrears before common stockholders receive dividends
Dividends in arrears on cumulative preferred stock A) never have to be paid, even if common dividends are paid.>>B) must be paid before common stockholders can receive a dividend.C) should be recorded as a current liability until they are paid.D) enable the preferred stockholders to share equally in corporate earnings with the common stockholders.
Dividends in arrears on cumulative preferred stock A) are considered to be a non-current liability.B) are considered to be a current liability.C) only occur when preferred dividends have been declared.>>D) should be disclosed in the notes to the financial statements.
Dividends in arrears are dividends on A) cumulative preferred stock that have been declared but have not been paid.B) non-cumulative preferred stock that have not been declared for a given period of time.>>C) cumulative preferred stock that have not been declared for a given period of time.D) common dividends that have been declared but have not yet been paid.
Outstanding stock of the Apex Corporation included 20,000 shares of $5 par common stock and 5,000 shares of 6%, $10 par non-cumulative preferred stock. In 2006, Apex declared and paid dividends of $2,000. In 2007, Apex declared and paid dividends of $6,000. How much of the 2007 dividend was distributed to preferred shareholders? A) $4,000B) $7,000>>C) $3,000D) None of the above
Outstanding stock of the Bell Corporation included 20,000 shares of $5 par common stock and 10,000 shares of 6%, $10 par non-cumulative preferred stock. In 2006, Bell declared and paid dividends of $4,000. In 2007, Bell declared and paid dividends of $12,000. How much of the 2007 dividend was distributed to preferred shareholders? A) $8,000B) $14,000>>C) $6,000D) None of the above
On January 1, Bluefield Corporation had 800,000 shares of $10 par value common stock outstanding. On March 31 the company declared a 10% stock dividend. Market value of the stock was $15/share. As a result of this event, A) Bluefield's Paid-in Capital in Excess of Par Value account increased $400,000.B) Bluefield's total stockholders' equity was unaffected.C) Bluefield's Retained Earnings account decreased $1,200,000.>>D) All of the above.
On January 1, Garrison Corporation had 1,000,000 shares of $10 par value common stock outstanding. On March 31 the company declared a 10% stock dividend. Market value of the stock was $15/share. As a result of this event, A) Garrison's Paid-in Capital in Excess of Par Value account increased $500,000.B) Garrison's total stockholders' equity was unaffected.C) Garrison's Retained Earnings account decreased $1,500,000.>>D) All of the above.
Which one of the following is not necessary in order for a corporation to pay a cash dividend? A) Adequate cash>>B) Approval of stockholdersC) Declared dividendsD) Retained earnings
The date on which a cash dividend becomes a binding legal obligation is on the >>A) declaration date.B) date of record.C) payment date.D) last day of the fiscal year end.
The board of directors of Essex Company declared a cash dividend on November 15, 2007, to be paid on December 15, 2007, to stockholders owning the stock on November 30, 2007. Given these facts, the date of November 30, 2007, is referred to as the A) declaration date.>>B) record date.C) payment date.D) ex-dividend date.
Which of the following is the appropriate general journal entry to record the declaration of cash dividends? A) Retained Earnings ______CashB) Dividends Payable _____CashC) Paid-in Capital ___Dividends Payable>>D) Retained Earnings ______Dividends Payable
A corporation records a dividend-related liability A) on the record date.B) on the payment date.C) when dividends are in arrears.>>D) on the declaration date.
Common Stock Dividends Distributable is classified as a(n) A) asset account.>>B) stockholders' equity account.C) expense account.D) liability account.
Stock dividends and stock splits have the following effects on retained earnings: Stock Splits:___ Stock Dividends: A) Increase____No change>>B) No change_____DecreaseC) Decrease____DecreaseD) No change____No change
Dividends are predominantly paid in A) scrip.B) property.>>C) cash.D) stock.
Of the four dividends types, the two most common types in practice are A) cash and scrip.B) cash and property.>>C) cash and stock.D) property and stock.
Regular dividends are declared out of A) Paid-in Capital in Excess of Par Value.B) Treasury Stock.C) Common Stock.>>D) Retained Earnings.
Which of the following is not a significant date with respect to dividends? A) The declaration date>>B) The incorporation dateC) The record dateD) The payment date
On the dividend record date A) a dividend becomes a current obligation.>>B) no entry is required.C) an entry may be required if it is a stock dividend.D) Dividends Payable is debited.
Which of the following statements regarding the date of a cash dividend declaration is not accurate? >>A) The dividend can be rescinded once it has been declared.B) The corporation is committed to a legal, binding obligation.C) The board of directors formally authorizes the cash dividend.D) A liability account must be increased.
Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections: Total Assets___Total Liabilities____Total Stockholders' Equity A) Increase__Decrease__No change>>B) No change__Increase__DecreaseC) Decrease__Increase__DecreaseD) Decrease__No change__Increase
Sun Inc. has 5,000 shares of 6%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2007. What is the annual dividend on the preferred stock? A) $60 per share>>B) $30,000 in totalC) $3,000 in totalD) $0.60 per share
DEN Inc. has 1,000 shares of 4%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2007. What is the annual dividend on the preferred stock? A) $40 per share>>B) $4,000 in totalC) $400 in totalD) $0.40 per share
Archer, Inc., has 10,000 shares of 8%, $100 par value, non-cumulative preferred stock and 40,000 shares of $1 par value common stock outstanding at December 31, 2007. There were no dividends declared in 2006. The board of directors declares and pays a $120,000 dividend in 2007. What is the amount of dividends received by the common stockholders in 2007? A) $0B) $80,000C) $120,000>>D) $40,000
Luther Inc., has 2,000 shares of 8%, $50 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2007, and December 31, 2006. The board of directors declared and paid a $6,000 dividend in 2006. In 2007, $24,000 of dividends are declared and paid. What are the dividends received by the preferred stockholders in 2007? A) $14,000B) $12,000>>C) $10,000D) $8,000
Anders, Inc., has 5,000 shares of 6%, $100 par value, cumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2007. There were no dividends declared in 2005. The board of directors declares and pays a $50,000 dividend in 2006 and in 2007. What is the amount of dividends received by the common stockholders in 2007? >>A) $10,000B) $30,000C) $50,000D) $0
Cuther Inc., has 1,000 shares of 8%, $50 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2006, andDecember 31, 2007. The board of directors declared and paid a $3,000 dividend in 2006. In 2007, $12,000 of dividends are declared and paid. What are the dividends received by the common stockholders in 2007? >>A) $7,000B) $6,000C) $5,000D) $4,000
Corporations generally issue stock dividends in order to A) increase the market price per share.B) exceed stockholders' dividend expectations.>>C) increase the marketability of the stock.D) decrease the amount of capital in the corporation.
A small stock dividend is defined as A) less than 30% but greater than 25% of the corporation's issued stock.B) between 50% and 100% of the corporation's issued stock.C) more than 30% of the corporation's issued stock.>>D) less than 20-25% of the corporation's issued stock.
The per share amount normally assigned by the board of directors to a large stock dividend is A) the market value of the stock on the date of declaration.B) the average price paid by stockholders on outstanding shares.>>C) the par or stated value of the stock.D) zero.
The per share amount normally assigned by the board of directors to a small stock dividend is >>A) the market value of the stock on the date of declaration.B) the average price paid by stockholders on outstanding shares.C) the par or stated value of the stock.D) zero.
Which of the following statements is not true about a 2 for 1 stock split? A) The market value of the stock will probably decrease.B) A stockholder with 5 shares before the split owns 10 shares after the split.C) Par value per share is reduced to half of what it was before the split.>>D) Total paid-in capital increases.
Irwin, Inc., had 200,000 shares of common stock outstanding before a stock split occurred, and 600,000 shares outstanding after the stock split. The stock split was A) 2 for 6.B) 6 for 1.C) 1 for 6.>>D) 3 for 1.
If the board of directors authorizes a $100,000 restriction of retained earnings for a future plant expansion, the effect of this action is to A) decrease total assets and total stockholders' equity.B) increase stockholders' equity and to decrease total liabilities.C) decrease total retained earnings and increase total liabilities.>>D) reduce the amount of retained earnings available for dividend declarations.
A net loss A) occurs if operating expenses exceed cost of goods sold.B) is not closed to Retained Earnings if it would result in a debit balance.>>C) is closed to Retained Earnings even if it would result in a debit balance.D) is closed to the Paid-in Capital account of the stockholders' equity section of the balance sheet.
Retained earnings are occasionally restricted A) to set aside cash for dividends.B) to keep the legal capital associated with paid-in capital intact.>>C) due to contractual loan restrictions.D) if preferred dividends are in arrears.
When retained earnings are restricted, total retained earnings >>A) are unaffected.B) increase.C) decrease.D) may increase or decrease.
What is the total stockholders' equity based on the following account balances? Paid-In Capital in Excess of Par__80,000 Retained Earnings__380,000 Treasury Stock__40,000 Common Stock__$1,000,000 A) $1,260,000>>B) $1,420,000C) $1,500,000D) $920,000
What is the total stockholders' equity based on the following account balances? Common Stock__$400,000 Paid-In Capital in Excess of Par__50,000 Retained Earnings__175,000 Treasury Stock__25,000 A) $650,000B) $625,000>>C) $600,000D) $450,000
What is the total stockholders' equity based on the following account balances? Common Stock__$550,000 Paid-In Capital in Excess of Par__50,000 Retained Earnings__180,000 Treasury Stock__30,000 A) $600,000B) $810,000C) $780,000>>D) $750,000
Turquoise and Topaz Sisters had retained earnings of $10,000 on the balance sheet but disclosed in the footnotes that $2,000 of retained earnings was restricted for plant expansion and $1,000 was restricted for bond repayments. Cash of $2,000 had been set aside for the plant expansion. How much of retained earnings is available for dividends? >>A) $7,000B) $8,000C) $10,000D) $5,000
Use the following to answer questions 86-88: Triad Corporation's December 31, 2007 Balance Sheet showed the following: 8% preferred stock, $20 par value, cumulative, 10,000 shares authorized; 5,000 shares issued__$100,000 Common stock, $10 par value, 1,000,000 shares authorized; 650,000 shares issued, 640,000 shares outstanding__6,500,000 Paid-in capital in excess of par value – preferred stock __20,000 Paid-in capital in excess of par value – common stock__9,000,000 Retained earnings__2,550,000 Treasury stock (10,000 shares)__210,000 86. Triad's total paid-in capital was >>A) $15,620,000.B) $15,830,000.C) $15,410,000.D) $9,020,000.
Triad declared and paid a $25,000 cash dividend on December 15, 2007. If the company's dividends in arrears prior to that date were $6,000, Triad's common stockholders received A) $19,000.B) $9,000.>>C) $11,000.D) no dividend.
Triad's total stockholders' equity was A) $18,380,000.B) $15,620,000.C) $18,170,000.>>D) $17,960,000.
Burgess Corporation began business by issuing 100,000 shares of $5 par value common stock for $24 per share. During its first year, the corporation sustained a net loss of $20,000. The year-end balance sheet would show >>A) Common stock of $500,000.B) Common stock of $2,400,000.C) Total paid-in capital of $2,380,000.D) Total paid-in capital of $1,900,000.
Use the following to answer questions 90-92: Starr Corporation's December 31, 2007 Balance Sheet showed the following: 8% preferred stock, $20 par value, cumulative, 20,000 shares authorized; 10,000 shares issued__$200,000 Common stock, $10 par value, 2,000,000 shares authorized; 1,300,000 shares issued, 1,280,000 shares outstanding__13,000,000 Paid-in capital in excess of par value – preferred stock__40,000 Paid-in capital in excess of par value – common stock__18,000,000 Retained earnings__5,100,000 Treasury stock (10,000 shares)__420,000 90. Starr's total paid-in capital was >>A) $31,240,000.B) $31,660,000.C) $30,820,000.D) $18,040,000.
Starr declared and paid a $50,000 cash dividend on December 15, 2007. If the company's dividends in arrears prior to that date were $12,000, Starr's common stockholders received A) $38,000.B) $18,000.>>C) $22,000.D) no dividend.
Starr's total stockholders' equity was A) $36,760,000.B) $31,240,000.C) $36,340,000.>>D) $35,920,000.
Paid-in capital in excess of stated value would appear on a balance sheet under the category A) capital stock.B) retained earnings.>>C) additional paid-in capital.D) contra to stockholders' equity.
Two classifications appearing in the paid-in capital section of the balance sheet are A) preferred stock and common stock.B) paid-in capital and retained earnings.>>C) capital stock and additional paid-in capital.D) capital stock and treasury stock.
All of the following are normally found in a corporation's stockholders' equity section except >>A) dividends in arrears.B) common stock.C) paid-in capital.D) retained earnings.
Information that is not generally reported for each class of stock on the balance sheet is >>A) the market value.B) the par value.C) shares authorized.D) shares issued.
On January 1, Brunner Corporation had 60,000 shares of $10 par value common stock outstanding. On March 17 the company declared a 10% stock dividend to stockholders of record on March 20. Market value of the stock was $13 on March 17. The entry to record the transaction of March 17 would include a A) credit to Retained Earnings for $18,000.B) credit to Cash for $78,000.>>C) credit to Common Stock Dividends Distributable for $60,000.D) debit to Common Stock Dividends Distributable for $60,000.
On January 1, Brunner Corporation had 60,000 shares of $10 par value common stock outstanding. On March 17 the company declared a 10% stock dividend to stockholders of record on March 20. Market value of the stock was $13 on March 17. The stock was distributed on March 30. The entry to record the transaction of March 30 would include a A) credit to Cash for $60,000.>>B) debit to Common Stock Dividends Distributable for $60,000.C) credit to Paid-in Capital in Excess of Par Value for $18,000.D) debit to Retained Earnings for $18,000.
On January 1, Runner Corporation had 60,000 shares of $10 par value common stock outstanding. On March 17 the company declared a 10% stock dividend to stockholders of record on March 20. Market value of the stock was $13 on March 17. The entry to record the transaction of March 17 would include a >>A) debit to Retained Earnings for $78,000.B) credit to Cash for $78,000.C) credit to Common Stock Dividends Distributable for $78,000.D) credit to Common Stock Dividends Distributable for $18,000.
On January 1, Runner Corporation had 60,000 shares of $10 par value common stock outstanding. On March 17 the company declared a 10% stock dividend to stockholders of record on March 20. Market value of the stock was $13 on March 17. The stock was distributed on March 30. The entry to record the transaction of March 30 would include a >>A) credit to Common Stock for $60,000.B) debit to Common Stock Dividends Distributable for $78,000.C) credit to Paid-in Capital in Excess of Par Value for $18,000.D) debit to Retained Earnings for $18,000.
If a corporation declares a 10% stock dividend on its common stock, the account to be debited on the date of declaration is A) Common Stock Dividends Distributable.B) Common Stock.C) Paid-in Capital in Excess of Par.>>D) Retained Earnings.
Which one of the following events would not require a journal entry on a corporation's books? >>A) 2 for 1 stock splitB) 100% stock dividendC) 2% stock dividendD) $1 per share cash dividend
Which of the following would not affect the balance of the Retained Earnings account? A) Net incomeA) Net incomeB) Stock dividend>>C) Stock splitD) Gains and losses of a company
The declaration and distribution of a stock dividend will A) increase total stockholders' equity.B) increase total assets.C) decrease total assets.>>D) have no effect on total assets.
The statement of cash flows A) must be prepared on a daily basis.>>B) summarizes the operating, financing, and investing activities of an entity.C) is another name for the income statement.D) is a special section of the income statement.
Which one of the following items is not generally used in preparing a statement of cash flows? >>A) Adjusted trial balanceB) Comparative balance sheetsC) Current income statementD) Additional information
The primary purpose of the statement of cash flows is to A) provide information about the investing and financing activities during a period.B) prove that revenues exceed expenses if there is a net income.>>C) provide information about the cash receipts and cash payments during a period.D) facilitate banking relationships.
If a company reports a net loss, it >>A) may still have a net increase in cash.B) will not be able to pay cash dividends.C) will not be able to get a loan.D) will not be able to make capital expenditures.
In addition to the three basic financial statements, which of the following is also a required financial statement? A) The ""Cash Budget"">>B) Statement of Cash FlowsC) Statement of Cash Inflows and OutflowsD) The ""Cash Reconciliation""
The statement of cash flows will not report the >>A) amount of checks outstanding at the end of the period.B) sources of cash in the current period.C) uses of cash in the current period.D) change in the cash balance for the current period.
The acquisition of land by issuing common stock is flows. >>A) a noncash transaction that is not reported in the body of a statement of cash flows.B) a cash transaction and would be reported in the body of a statement of cash flows.C) a noncash transaction and would be reported in the body of a statement of cashD) only reported if the statement of cash flows is prepared using the direct method.
The order of presentation of activities on the statement of cash flows is >>A) operating, investing, and financing.B) operating, financing, and investing.C) financing, operating, and investing.D) financing, investing, and operating.
Financing activities involve A) lending money.B) acquiring investments.>>C) issuing debt.D) acquiring long-lived assets.
Investing activities include >>A) collecting cash on loans made.B) obtaining cash from creditors.C) obtaining capital from owners.D) repaying money previously borrowed.
Generally, the most important category on the statement of cash flows is cash flows from >>A) operating activities.B) investing activities.C) financing activities.D) significant noncash activities.
The category that is generally considered to be the best measure of a company's ability to continue as a going concern is >>A) cash flows from operating activities.B) cash flows from investing activities.C) cash flows from financing activities.D) usually different from year to year.
Cash receipts from interest and dividends are classified as A) financing activities.B) investing activities.>>C) operating activities.D) either financing or investing activities.
Garden Corporation engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows. Assume the indirect method is used. Declared and issued a stock dividend. A) Operating activities sectionB) Investing activities sectionC) Financing activities section>>D) Does not represent a cash flow
Garden Corporation engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows. Assume the indirect method is used. Collected accounts receivable. >>A) Operating activities sectionB) Investing activities sectionC) Financing activities sectionD) Does not represent a cash flow
Garden Corporation engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows. Assume the indirect method is used. Purchased inventory with cash. >>A) Operating activities sectionB) Investing activities sectionC) Financing activities sectionD) Does not represent a cash flow
Garden Corporation engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows. Assume the indirect method is used. Retired long-term debt with cash. A) Operating activities sectionB) Investing activities section>>C) Financing activities sectionD) Does not represent a cash flow
Garden Corporation engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows. Assume the indirect method is used. Paid interest on note. >>A) Operating activities sectionB) Investing activities sectionC) Financing activities sectionD) Does not represent a cash flow
Garden Corporation engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows. Assume the indirect method is used. Issued stock for equipment. A) Operating activities sectionB) Investing activities sectionC) Financing activities section>>D) Does not represent a cash flow
Garden Corporation engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows. Assume the indirect method is used. Received dividends on securities held. >>A) Operating activities sectionB) Investing activities sectionC) Financing activities sectionD) Does not represent a cash flow
Garden Corporation engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows. Assume the indirect method is used. Paid income taxes. >>A) Operating activities sectionB) Investing activities sectionC) Financing activities sectionD) Does not represent a cash flow
Garden Corporation engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows. Assume the indirect method is used. Issued common stock for cash. A) Operating activities sectionB) Investing activities section>>C) Financing activities sectionD) Does not represent a cash flow
Garden Corporation engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows. Assume the indirect method is used. Purchased land for cash. A) Operating activities section>>B) Investing activities sectionC) Financing activities sectionD) Does not represent a cash flow
Garden Corporation engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows. Assume the indirect method is used. Purchased land and building with a mortgage. A) Operating activities sectionB) Investing activities sectionC) Financing activities section>>D) Does not represent a cash flow
Garden Corporation engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows. Assume the indirect method is used. Purchased treasury stock with cash. A) Operating activities sectionB) Investing activities section>>C) Financing activities sectionD) Does not represent a cash flow
If a company has both an inflow and outflow of cash related to property, plant, and equipment, the ______________ in the investing activities section. A) two cash effects must be netted and presented as one item>>B) cash inflow and cash outflow must be reported separatelyC) cash outflow is only is presented.D) cash inflow and cash outflow can either be reported separately or presented as one item.
Of the items below, the one that appears first on the statement of cash flows is A) noncash investing and financing activities.>>B) net increase (decrease) in cash.C) cash at the end of the period.D) cash at the beginning of the period.
Which of the following transactions does not affect cash during a period? >>A) Write-off of an uncollectible accountB) Collection of an accounts receivableC) Sale of treasury stockD) Redeeming bonds before maturity
Significant noncash transactions would not include A) conversion of bonds into common stock.B) asset acquisition through bond issuance.>>C) treasury stock acquisition.D) exchange of plant assets.
Preferred stock issued in exchange for land would be reported in the statement of cash flows in A) the cash flows from financing activities section.B) the cash flows from investing activities section.>>C) a separate schedule or note to the financial statements.D) the cash flows from operating section.
In preparing a statement of cash flows, a conversion of bonds into common stock will be reported in A) the financing section.B) the ""extraordinary"" section.>>C) a separate schedule or note to the financial statements.D) the stockholders' equity section.
On the statement of cash flows, the cash flows from operating activities section would include A) receipts from the issuance of capital stock.B) receipts from the sale of investments.C) payments for the acquisition of investments.>>D) cash receipts from sales activities.
Cash flows from operating activities, as reported on the statement of cash flows under the indirect method, would include A) receipts from the sale of investments.>>B) net income.C) payments for dividends.D) receipts from the issuance of capital stock.
The issuance of debt to purchase assets would be classified as a(n) A) operating activity.B) investing activity.C) financing activity.>>D) none of the above.
The payment of a cash dividend would be classified as a(n) A) operating activity.B) investing activity.>>C) financing activity.D) significant noncash activity.
Which of the following activities would be classified as an investing activity? A) Cash received from interest revenue.>>B) Cash paid (loaned) to a borrower as a loan.C) Cash received from dividend revenue.D) Cash paid to reacquire capital stock.
Joy Elle's Vegetable Market had the following transactions during 2007: 1. Issued $25,000 of par value common stock for cash. 2. Recorded and paid wages expense of $10,000. 3. Acquired land by issuing common stock of par value $50,000. 4. Declared and paid a cash dividend of $1,000. 5. Sold a long-term investment (cost $3,000) for cash of $3,000. 6. Recorded cash sales of $20,000. 7. Bought inventory for cash of $2,000. 8. Acquired an investment in IBM stock for cash of $6,000. 9. Converted bonds payable to common stock in the amount of $10,000. 10. Repaid a 6 year note payable in the amount of $11,000. What is the net cash provided by operating activities? A) $20,000.B) $18,000.C) $10,000.>>D) $8,000.
Joy Elle's Vegetable Market had the following transactions during 2007: 1. Issued $25,000 of par value common stock for cash. 2. Recorded and paid wages expense of $10,000. 3. Acquired land by issuing common stock of par value $50,000. 4. Declared and paid a cash dividend of $1,000. 5. Sold a long-term investment (cost $3,000) for cash of $3,000. 6. Recorded cash sales of $20,000. 7. Bought inventory for cash of $2,000. 8. Acquired an investment in IBM stock for cash of $6,000. 9. Converted bonds payable to common stock in the amount of $10,000. 10. Repaid a 6 year note payable in the amount of $11,000. What is the net cash provided by financing activities? >>A) $13,000.B) $25,000.C) $14,000.D) $9,000.
Joy Elle's Vegetable Market had the following transactions during 2007: 1. Issued $25,000 of par value common stock for cash. 2. Recorded and paid wages expense of $10,000. 3. Acquired land by issuing common stock of par value $50,000. 4. Declared and paid a cash dividend of $1,000. 5. Sold a long-term investment (cost $3,000) for cash of $3,000. 6. Recorded cash sales of $20,000. 7. Bought inventory for cash of $2,000. 8. Acquired an investment in IBM stock for cash of $6,000. 9. Converted bonds payable to common stock in the amount of $10,000. 10. Repaid a 6 year note payable in the amount of $11,000. What is the net cash provided by investing activities? A) $6,000.B) $16,000>>C) ($3,000).D) $3,000.
Morris Company issued 10,000 shares of $1 par common stock for $25 per share during 2007. The company paid dividends of $24,000 and issued long-term notes payable of $220,000 during the year. What amount of cash flows from financing activities will be reported on the statement of cash flows? A) $6,000 net cash inflow.B) $226,000 net cash inflow.C) $470,000 net cash outflow.>>D) $446,000 net cash inflow.
Miller Company purchased treasury stock with a cost of $15,000 during 2007. During the year, the company paid dividends of $20,000 and issued bonds payable for proceeds of $816,000. Cash flows from financing activities for 2007 total A) $796,000 net cash inflow.B) $811,000 net cash inflow.C) $5,000 net cash outflow.>>D) $781,000 net cash inflow.
Which of the following is the first step in preparing the statement of cash flows? >>A) Determine the net cash provided by operating activities.B) Determine the net income.C) Determine net cash provided by investing and financing activities.D) Determine the net increase (decrease) in cash.
Cline Company issued common stock for proceeds of $186,000 during 2007. The company paid dividends of $33,000 and issued a long-term note payable for $45,000 in exchange for equipment during the year. The company also purchased treasury stock that had a cost of $7,000. The financing section of the statement of cash flows will report net cash inflows of >>A) $146,000.B) $202,000.C) $153,000.D) $179,000.
During 2007, Dole Company sold equipment with a book value of $90,000 for proceeds of $104,000. The company purchased new equipment for $240,000 by signing a long-term note payable. No other transactions impacted long-term asset accounts during 2007. The investing section of the statement of cash flows will report A) net cash outflows of $226,000.B) net cash outflows of $136,000.>>C) net cash inflows of $104,000.D) net cash inflows of $14,000.
In Gentry Company, land decreased $120,000 because of a cash sale for $120,000, the equipment account increased $40,000 as a result of a cash purchase, and Bonds Payable increased $130,000 from issuance for cash at face value. The net cash provided by investing activities is A) $120,000.B) $210,000.>>C) $80,000.D) $90,000.
In order to determine net cash provided by operating activities, a company must convert net income from an accrual basis to a cash basis under A) the direct method only.B) the indirect method only.>>C) both the direct method and the indirect method.D) neither the direct nor the indirect method.
Cash from investing becomes positive and cash from financing becomes more negative during the A) introductory phase.B) growth phase.C) maturity phase.>>D) decline phase.
Cash generated from operations exceeds investing needs, and the company can begin retiring debt during the A) introductory phase.B) growth phase.>>C) maturity phase.D) decline phase.
Collections on accounts receivable will lag behind sales, and accrual sales during a period will exceed cash collections during the A) introductory phase.>>B) growth phase.C) maturity phase.D) decline phase.
A company would be expected to generate small amounts of cash from operations during the A) introductory phase.>>B) growth phase.C) maturity phase.D) decline phase.
The phase in the product life cycle when a company is purchasing fixed assets and beginning to produce and sell is the >>A) introductory phase.B) growth phase.C) maturity phase.D) decline phase.
Cash from operations and net income are approximately the same during the A) introductory phase.B) growth phase.>>C) maturity phase.D) decline phase.
Which one of the following items is not necessary in preparing a statement of cash flows? A) Determine the change in cashB) Determine the cash provided by operationsC) Determine cash from financing and investing activities>>D) Determine the cash in each of the bank accounts
If accounts receivable have increased during the period A) revenues on an accrual basis are less than revenues on a cash basis.>>B) revenues on an accrual basis are greater than revenues on a cash basis.C) revenues on an accrual basis are the same as revenues on a cash basis.D) expenses on an accrual basis are greater than expenses on a cash basis.
Accounts receivable arising from sales to customers amounted to $80,000 and $70,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $240,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is A) $240,000.>>B) $250,000.C) $310,000.D) $230,000.
Accounts receivable arising from sales to customers amounted to $35,000 and $40,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $120,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is A) $120,000.B) $125,000.C) $155,000.>>D) $115,000.
Accounts receivable arising from sales to customers amounted to $40,000 and $35,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $110,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is A) $110,000.B) $105,000.>>C) $115,000.D) $150,000.
If accounts payable have increased during a period A) revenues on an accrual basis are less than revenues on a cash basis.B) expenses on an accrual basis are less than expenses on a cash basis.>>C) expenses on an accrual basis are greater than expenses on a cash basis.D) expenses on an accrual basis are the same as expenses on a cash basis.
Which one of the following affects cash during a period? A) Recording depreciation expenseB) Declaration of a cash dividendC) Write-off of an uncollectible account receivable>>D) Payment of an accounts payable
In calculating cash flows from operating activities using the indirect method, a gain on the sale of equipment is A) added to net income.>>B) deducted from net income.C) ignored because it does not affect cash.D) not reported on a statement of cash flows.
In calculating cash flows from operating activities using the indirect method, a loss on the sale of equipment is >>A) added to net income.B) deducted from net income.C) ignored because it does not affect cash.D) not reported on a statement of cash flows.
Bilton Company reported net income of $30,000 for the year. During the year, accounts receivable increased by $7,000, accounts payable decreased by $3,000 and depreciation expense of $5,000 was recorded. Net cash provided by operating activities for the year is >>A) $25,000.B) $45,000.C) $29,000.D) $30,000.
Wilton Company reported net income of $40,000 for the year. During the year, accounts receivable increased by $7,000, accounts payable decreased by $3,000 and depreciation expense of $5,000 was recorded. Net cash provided by operating activities for the year is A) $30,000.B) $45,000.C) $39,000.>>D) $35,000
Loster Company reported a net loss of $10,000 for the year ended December 31, 2007. During the year, accounts receivable decreased $5,000, merchandise inventory increased $8,000, accounts payable increased by $10,000, and depreciation expense of $5,000 was recorded. During 2007, operating activities A) used net cash of $2,000.B) used net cash of $8,000.>>C) provided net cash of $2,000.D) provided net cash of $8,000.
Buster Company reported a net loss of $3,000 for the year ended December 31, 2007. During the year, accounts receivable decreased $7,000, merchandise inventory increased $5,000, accounts payable increased by $10,000, and depreciation expense of $5,000 was recorded. During 2007, operating activities A) used net cash of $1,000.B) used net cash of $14,000.>>C) provided net cash of $14,000.D) provided net cash of $9,000.
Starting with net income and adjusting it for items that affected reported net income but which did not affect cash is called the A) direct method.>>B) indirect method.C) working capital method.D) cost-benefit method.
In calculating net cash provided by operating activities using the indirect method, an increase in prepaid expenses during a period is >>A) deducted from net income.B) added to net income.C) ignored because it does not affect income.D) ignored because it does not affect expenses.
Using the indirect method, patent amortization expense for the period A) is deducted from net income.B) causes cash to increase.C) causes cash to decrease.>>D) is added to net income.
In developing the cash flows from operating activities, most companies in the United States A) use the direct method.>>B) use the indirect method.C) present both the indirect and direct methods in their financial reports.D) prepare the operating activities section on the accrual basis.
Which of the following would be subtracted from net income using the indirect method? A) Depreciation expense>>B) An increase in accounts receivableC) An increase in accounts payableD) A decrease in prepaid expenses
Which of the following would be added to net income using the indirect method? A) An increase in accounts receivableB) An increase in prepaid expenses>>C) Depreciation expenseD) A decrease in accounts payable
Which of the following would not be an adjustment to net income using the indirect method? A) Depreciation ExpenseB) An increase in Prepaid InsuranceC) Amortization Expense>>D) An increase in Land
In calculating cash flows from operating activities using the indirect method, a loss on the sale of equipment will appear as a(n) A) subtraction from net income.>>B) addition to net income.C) addition to cash flow from investing activities.D) subtraction from cash flow from investing activities.
Using the indirect method, which of the following adjustments to convert net income to net cash provided by operating activities is correct? Add to Net Income********Deduct from Net Income A) Accounts Receivable: increase********decreaseB) Prepaid Expenses: increase*****decrease>>C) Inventory: decrease******increaseD) Taxes Payable: decrease*******increase
Using the indirect method, which of the following adjustments to convert net income to net cash provided by operating activities is incorrect? Add to Net Income********Deduct from Net Income A) Accounts Receivable: decrease*****increase>>B) Prepaid Expenses: increase*****decreaseB) Prepaid Expenses: increase******decreaseD) Accounts Payable: increase******decrease
Which of the following adjustments to convert net income to net cash provided by operating activities is not added to net income? >>A) Gain on Sale of EquipmentB) Depreciation ExpenseC) Patent Amortization ExpenseD) Depletion Expense
Using the indirect method, if equipment is sold at a gain, the A) sale proceeds received are deducted in the operating activities section.B) sale proceeds received are added in the operating activities section.C) amount of the gain is added in the operating activities section.>>D) amount of the gain is deducted in the operating activities section.
On the statement of cash flows using the indirect method, patent amortization expense will >>A) be added to net income in the operating section.B) be deducted from net income in the operating section.C) appear as an inflow of cash in the investing section.D) appear as an outflow of cash in the investing section.
A company had net income of $705,000. Depreciation expense is $78,000. During the year, accounts receivable and inventory increased $45,000 and $120,000, respectively. Prepaid expenses and accounts payable decreased $6,000 and $12,000, respectively. There was also a loss on the sale of equipment of $9,000. How much cash was provided by operating activities? A) $603,000.>>B) $621,000.C) $843,000.D) $879,000.
A company had net income of $242,000. Depreciation expense is $26,000. During the year, accounts receivable and inventory increased $15,000 and $40,000, respectively. Prepaid expenses and accounts payable decreased $2,000 and $4,000, respectively. There was also a loss on the sale of equipment of $3,000. How much cash was provided by operating activities? >>A) $214,000.B) $207,000.C) $274,000.D) $295,000.
The net income reported on the income statement for the current year was $840,000. Depreciation recorded on plant assets was $38,000. Accounts receivable and inventories increased by $8,000 and $32,000, respectively. Prepaid expenses and accounts payable decreased by $4,000 and $44,000, respectively. How much cash was provided by operating activities? A) $760,000B) $840,000>>C) $798,000D) $984,000
The net income reported on the income statement for the current year was $205,000. Depreciation recorded on plant assets was $38,000. Accounts receivable and inventories increased by $2,000 and $8,000, respectively. Prepaid expenses and accounts payable decreased by $1,000 and $11,000, respectively. How much cash was provided by operating activities? A) $185,000>>B) $223,000C) $205,000D) $239,000
The net income reported on the income statement for the current year was $220,000. Depreciation was $50,000. Accounts receivable and inventories decreased by $10,000 and $30,000, respectively. Prepaid expenses and accounts payable increased, respectively, by $1,000 and $8,000. How much cash was provided by operating activities? A) $281,000>>B) $317,000C) $301,000D) $239,000
The net income reported on the income statement for the current year was $210,000. Depreciation was $25,000. Accounts receivable and inventories decreased by $5,000 and $15,000, respectively. Prepaid expenses and accounts payable increased, respectively, by $500 and $4,000. How much cash was provided by operating activities? A) $240,500B) $250,500>>C) $258,500D) $219,500
The indirect and direct methods of preparing the statement of cash flows are identical except for the
If $180,000 of bonds are issued during the year but $300,000 of old bonds are retired during the year, the statement of cash flows will show a(n) A) net increase in cash of $120,000.B) net decrease in cash of $120,000.>>C) increase in cash of $180,000 and a decrease in cash of $300,000.D) net loss on retirement of bonds of $120,000.
If $120,000 of bonds are issued during the year but $200,000 of old bonds are retired during the year, the statement of cash flows will show a(n) A) net increase in cash of $80,000.B) net decrease in cash of $80,000.>>C) increase in cash of $120,000 and a decrease in cash of $200,000.D) net loss on retirement of bonds of $80,000.
Which of the following changes in retained earnings during a period will be reported in the financing activities section of the statement of cash flows? 2. Net income for the period 1. Declaration and payment of a cash dividend during the period >>A) 1B) 2C) Neither 1 nor 2D) Both 1 and 2
The statement of cash flows A) is prepared instead of an income statement under generally accepted accounting principles.>>B) is used to assess an entity's ability to pay dividends and meet obligations.C) is prepared from comparative income statements.D) reflects earnings per share figures on a cash basis and on an accrual basis in the body of the statement.
In preparing the statement of cash flows, determining the net increase or decrease in cash requires the use of A) the adjusted trial balance.B) the current period's retained earnings statement.>>C) a comparative balance sheet.D) a comparative income statement.
To determine the net cash provided (used) by operating activities, it is necessary to analyze A) the current year's income statement.B) a comparative balance sheet.C) additional information.>>D) all of the above.
Which of the following would not be needed to determine net cash provided by operating activities? A) Depreciation expenseB) Change in accounts receivable>>C) Payment of cash dividendsD) Change in prepaid expenses
When equipment is sold for cash, the amount received is reflected as a cash A) inflow in the operating section.B) inflow in the financing section.>>C) inflow in the investing section.D) outflow in the operating section.
The statement of cash flows will not provide insight into A) why dividends were not increased.B) whether cash flow is greater than net income.>>C) the exact proceeds of a future bond issue.D) how the retirement of debt was accomplished.
If a gain of $18,000 is incurred in selling (for cash) office equipment having a book value of $120,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is A) $102,000.B) $120,000.>>C) $138,000.D) $18,000.
If a loss of $31,000 is incurred in selling (for cash) office equipment having a book value of $100,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is >>A) $69,000.B) $100,000.C) $131,000.D) $31,000.
If a gain of $10,000 is incurred in selling (for cash) office equipment having a book value of $100,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is A) $90,000.>>B) $110,000.C) $100,000.D) $10,000.
If a loss of $12,500 is incurred in selling (for cash) office equipment having a book value of $50,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is >>A) $37,500.B) $50,000.C) $62,500.D) $12,500.
Land costing $125,000 was sold for $155,000 cash. The gain on the sale was reported on the income statement as other income. On the statement of cash flows, what amount should be reported as an investing activity from the sale of land? A) $125,000>>B) $155,000C) $185,000D) $30,000
When using the indirect method to compute cash provided by operating activities A) income taxes paid may be ignored.>>B) amortization expense is added to net income.C) decreases in inventory are subtracted from net income.D) increases in accounts receivable are added to net income.
A transaction involving a gain on the sale of equipment affects cash provided (used) by A) financing and investing activities.B) operating and financing activities.>>C) operating and investing activities.D) operating, financing, and investing activities.
Harbor Company reported net income of $60,000 for the year ended December 31, 2007. During the year, inventories decreased by $12,000, accounts payable decreased by $18,000, depreciation expense was $20,000 and a gain on disposal of equipment of $9,000 was recorded. Net cash provided by operating activities in 2007 using the indirect method was A) $119,000.>>B) $65,000.C) $77,000.D) $55.000.
All of the following adjustments are added to net income in computing net cash provided by operating activities except A) amortization expense.B) a decrease in accounts receivable.C) an increase in accounts payable.>>D) an increase in prepaid expenses.
All of the following adjustments would be deducted in determining net cash provided by operating activities except a(n) A) increase in inventories.>>B) depreciation expense.C) gain on sale of plant assets.D) decrease in accrued expenses payable.
Each of the following is an adjustment to convert net income to net cash provided by operating activities except A) adding back noncash expenses.>>B) adding gains and deducting losses.C) analyzing changes to noncash current asset and current liability accounts.D) All of the above are adjustments.

OR Download File for BlackBerry Desktop Manager


Footer
Questions or comments? See our Support page.
Copyright © 2011, gWhiz, LLC. All rights reserved.