Question 1

The indirect method is by far the more popular of the two methods of constructing the statement of cash flows in the United States.

Accepted Answer

A) True 
 B)False

Question 2

Goodwill is amortized for financial statement purposes.

Accepted Answer

A) True 
 B)False

Question 3

An income statement that contains one or more subtotals

Accepted Answer

Multi- ste

Question 4

Nonoperating items on the income statement:

Accepted Answer

A)  appear on the income statement immediately after gross profit 
B)  appear only on corporate income statements 
C)  reflect the effects of financial management decisions 
D)  are revenues and expenses arising from adjusting entries 
A)  appear on the income statement immediately after gross profit 
B)  appear only on corporate income statements 
C)  reflect the effects of financial management decisions 
D)  are revenues and expenses arising from adjusting entries

Question 5

Consisting of merchandise, finished products of manufacturers, goods in the process of being manufactured, and raw materials

Accepted Answer

The answer of Consisting of merchandise, finished products of manufacturers,...

Question 6

A corporation's own stock that has been issued and subsequently repurchased by the company and is being held for a specific purpose

Accepted Answer

The answer of A corporation's own stock that has been...

Question 7

Debentures are:

Accepted Answer

A)  debt secured by a general claim against total assets 
B)  short- term liabilities arising from income transactions 
C)  debt secured by a claim against specific assets 
D)  unearned revenues 
A)  debt secured by a general claim against total assets 
B)  short- term liabilities arising from income transactions 
C)  debt secured by a claim against specific assets 
D)  unearned revenues

Question 8

A company had the following information: $\begin{array}{lll}
\text { Cash } & \$ 6,000& \text { Sales } & \$ 142,000 \
\text { Depreciation expens e } & 4,000 &\text { Dividends paid } & 3,000 \
\text { Prep aid rent } & 1,400 &\text { Rent expense } & 3,600 \
\text { Cost of goods sold } & 68,000 &\text { Wage expense } & 41,000
\end{array}$ The net income for the period is:

Accepted Answer

A)  $26,800 
B)  $22,400 
C)  $25,400 
D)  $23,800 
A)  $26,800 
B)  $22,400 
C)  $25,400 
D)  $23,800

Question 9

Given below is a list of events: 1. payment of employee wages
2) cash collections from customers
3) sale of capital stock
4) sale of land, at cost
5) payment of a cash dividend
6) borrow cash from creditors
7) purchase of equipment
8) cash sale of inventory
9) purchase inventory on account
Which of the above events are outflows in the operating section of the statement of cash flows?

Accepted Answer

A)  1, 5, and 9 
B)  1 and 9 
C)  2 and 8 
D)  only 1 
A)  1, 5, and 9 
B)  1 and 9 
C)  2 and 8 
D)  only 1

Question 10

The section in the statement of cash flows that lists the cash flow effects of obtaining cash from creditors and owners, repaying creditors or buying back stock from owners, and paying cash dividends

Accepted Answer

Financing

Question 11

When reconciling net income to net cash provided by operating activities, all of the following would be an appropriate procedure except:

Accepted Answer

A)  adding depreciation expense 
B)  adding a decrease in inventories 
C)  subtracting a decrease in prepaid expenses 
D)  subtracting a decrease in accounts payable 
A)  adding depreciation expense 
B)  adding a decrease in inventories 
C)  subtracting a decrease in prepaid expenses 
D)  subtracting a decrease in accounts payable

Question 12

Leasehold improvements are amortized.

Accepted Answer

A) True 
 B)False

Question 13

Growing companies usually have a large cash inflow from investments.

Accepted Answer

A) True 
 B)False

Question 14

The operating section of a new company usually shows a net cash outflow.

Accepted Answer

A) True 
 B)False

Question 15

The Allowance for Bad Debts account is added to the Accounts Receivable account on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 16

Freight and installation are normally added to equipment's basis.

Accepted Answer

A) True 
 B)False

Question 17

Depreciation expense is not a source of cash.

Accepted Answer

A) True 
 B)False

Question 18

Stone Cold Company reported cost of goods sold of $870,000, an increase in inventory of $100,000, and a decrease in accounts payable of $40,000. was paid to Stone Cold Company's suppliers.

Accepted Answer

A)  $1,010,000 
B)  $930,000 
C)  $730,000 
D)  $810,000 
A)  $1,010,000 
B)  $930,000 
C)  $730,000 
D)  $810,000

Question 19

The three activities of a statement of cash flows

Accepted Answer

Operating,

Question 20

Accounts receivable is a current asset.

Accepted Answer

A) True 
 B)False

The indirect method is by far the more popular of the two methods of constructing the statement of cash flows in the United States.

Goodwill is amortized for financial statement purposes.

An income statement that contains one or more subtotals

Nonoperating items on the income statement:

Consisting of merchandise, finished products of manufacturers, goods in the process of being manufactured, and raw materials

A corporation's own stock that has been issued and subsequently repurchased by the company and is being held for a specific purpose

Debentures are:

A company had the following information: Cash \ 6,000 Sales \ 142,000 Depreciation expens e 4,000 Dividends paid 3,000 Prep aid rent 1,400 Rent expense 3,600 Cost of goods sold 68,000 Wage expense 41,000 The net income for the period is:

The section in the statement of cash flows that lists the cash flow effects of obtaining cash from creditors and owners, repaying creditors or buying back stock from owners, and paying cash dividends

When reconciling net income to net cash provided by operating activities, all of the following would be an appropriate procedure except:

Leasehold improvements are amortized.

Growing companies usually have a large cash inflow from investments.

The operating section of a new company usually shows a net cash outflow.

The Allowance for Bad Debts account is added to the Accounts Receivable account on the balance sheet.

Freight and installation are normally added to equipment's basis.

Depreciation expense is not a source of cash.

Stone Cold Company reported cost of goods sold of $870,000, an increase in inventory of $100,000, and a decrease in accounts payable of $40,000. was paid to Stone Cold Company's suppliers.

The three activities of a statement of cash flows

Accounts receivable is a current asset.

Managerial Accounting and the Business Organization

Introduction to Cost Behavior and Cost Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information and Decision-Making: Marketing Decisions

Relevant Information and Decision-Making: Product Decisions

The Master Budget

Flexible Budget and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Job-Costing

Process-Costing Systems

Overhead Application: Variable and Absorbtion Costing

Understanding Corporate Annual Reports: Basic Financial Statements

Filters

Exam 16: Basic Accounting Concepts, Techniques, and Conventions

The indirect method is by far the more popular of the two methods of constructing the statement of cash flows in the United States.

Goodwill is amortized for financial statement purposes.

An income statement that contains one or more subtotals

Nonoperating items on the income statement:

Consisting of merchandise, finished products of manufacturers, goods in the process of being manufactured, and raw materials

A corporation's own stock that has been issued and subsequently repurchased by the company and is being held for a specific purpose

Debentures are:

A company had the following information: Cash \ 6,000 Sales \ 142,000 Depreciation expens e 4,000 Dividends paid 3,000 Prep aid rent 1,400 Rent expense 3,600 Cost of goods sold 68,000 Wage expense 41,000 The net income for the period is:

The section in the statement of cash flows that lists the cash flow effects of obtaining cash from creditors and owners, repaying creditors or buying back stock from owners, and paying cash dividends

When reconciling net income to net cash provided by operating activities, all of the following would be an appropriate procedure except:

Leasehold improvements are amortized.

Growing companies usually have a large cash inflow from investments.

The operating section of a new company usually shows a net cash outflow.

The Allowance for Bad Debts account is added to the Accounts Receivable account on the balance sheet.

Freight and installation are normally added to equipment's basis.

Depreciation expense is not a source of cash.

Stone Cold Company reported cost of goods sold of $870,000, an increase in inventory of $100,000, and a decrease in accounts payable of $40,000. was paid to Stone Cold Company's suppliers.

The three activities of a statement of cash flows

Accounts receivable is a current asset.

Managerial Accounting and the Business Organization

Introduction to Cost Behavior and Cost Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information and Decision-Making: Marketing Decisions

Relevant Information and Decision-Making: Product Decisions

The Master Budget

Flexible Budget and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Job-Costing

Process-Costing Systems

Overhead Application: Variable and Absorbtion Costing

Understanding Corporate Annual Reports: Basic Financial Statements

Filters