Question 1

The return on equity for Matthews Corporation is ________.

Accepted Answer

A) 27.7% 
B) 24.9% 
C) 30.9% 
D) 31.2% 
A) 27.7% 
B) 24.9% 
C) 30.9% 
D) 31.2%

Question 2

Presented below are activities from Prosser Industries,Inc.
   Required: Please indicate whether each of these activities is classified as an (O)perating,(I)nvesting,or (F)inancing Activity on the statement of cash flows.

Accepted Answer

The answer of Presented below are activities from Prosser Industries,Inc.
...

Question 3

Which of the following is considered an financing activity when preparing the statement of cash flows?

Accepted Answer

A) a purchase of equipment 
B) a payment on an equipment note 
C) sale of common stock 
D) payment of interest on a bond issue 
A) a purchase of equipment 
B) a payment on an equipment note 
C) sale of common stock 
D) payment of interest on a bond issue

Question 4

Which of the following topics is not required by the Securities and Exchange Commission to be included in the Management Discussion and Analysis section?

Accepted Answer

A) liquidity 
B) summary of significant accounting policies 
C) capital resources 
D) off balance sheet arrangements 
A) liquidity 
B) summary of significant accounting policies 
C) capital resources 
D) off balance sheet arrangements

Question 5

There is an inverse relationship between a company's solvency level and risk of default.

Accepted Answer

A) True 
 B)False

Question 6

Explain the difference between the direct and indirect methods of preparing the operating section of the statement of cash flows.Which method is preferred by GAAP?

Accepted Answer

When the indirect method of preparing th

Question 7

Cash flows from investing activities are ________.

Accepted Answer

A) $(1,000) 
B) $3,000 
C) $3,800 
D) $5,500 
A) $(1,000) 
B) $3,000 
C) $3,800 
D) $5,500

Question 8

Redemption of bonds payable is classified as a financing activity on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 9

Johnson Company presented its financial statements to a local bank as part of a loan application.The loan officer was concerned,because,even though cash flow had increased during the year and net income was positive,cash flows from operating activities had a significant negative balance.At the same time,the company had sold a large part of its investment portfolio and issued additional stock to its shareholders.
Write a memo to Johnson Company and explain the loan officer's concern.Include the relationship between cash flows from the three types of activities.

Accepted Answer

Memo
 To:Johnson Company
 From:Local Ban

Question 10

What is total stockholders' equity for San Marcos Corporation?

Accepted Answer

A) $710 
B) $818 
C) $993 
D) $1,058 
A) $710 
B) $818 
C) $993 
D) $1,058

Question 11

Presented below are the comparative balance sheets and income statement for Pierce Manufacturing Corporation (in $ Million)for the year ended December 31,Year 2:
     Prepare the operating section of the statement of cash flows using the direct method and a reconciliation using the indirect method.

Accepted Answer

Direct Met

Question 12

When using the direct method,losses on the sale of long-term assets are added to net income in the operating activities section.

Accepted Answer

A) True 
 B)False

Question 13

If a subsequent event relates to a condition that existed at the balance sheet date,then the financial statements should be adjusted.

Accepted Answer

A) True 
 B)False

Question 14

What are total liabilities for San Marcos Corporation?

Accepted Answer

A) $1,715 
B) $1,755 
C) $1,770 
D) $1,810 
A) $1,715 
B) $1,755 
C) $1,770 
D) $1,810

Question 15

The debt to equity ratio for Teague Industries is ________.

Accepted Answer

A) 1.01 
B) .829 
C) 2.15 
D) 2.62 
A) 1.01 
B) .829 
C) 2.15 
D) 2.62

Question 16

The return on assets for Matthews Corporation is ________.

Accepted Answer

A) 8)89% 
B) 8)17% 
C) 8)51% 
D) 14.41% 
A) 8)89% 
B) 8)17% 
C) 8)51% 
D) 14.41%

Question 17

The statement of cash flows enables financial statement users to do all of the following except ________.

Accepted Answer

A) assess an entity's ability to pay liabilities and dividends 
B) determine the extent to which an entity will require external financing 
C) assess the collectibility of existing accounts receivable 
D) reconcile differences between net income and the associated cash receipts and payments 
A) assess an entity's ability to pay liabilities and dividends 
B) determine the extent to which an entity will require external financing 
C) assess the collectibility of existing accounts receivable 
D) reconcile differences between net income and the associated cash receipts and payments

Question 18

The debt to equity ratio for Matthews Corporation is ________.

Accepted Answer

A) .495 
B) .992 
C) 2.05 
D) 2.28 
A) .495 
B) .992 
C) 2.05 
D) 2.28

Question 19

The first footnote in a set of financial statements is usually a Summary of Significant Accounting Policies.

Accepted Answer

A) True 
 B)False

Question 20

When preparing a the operating section of the statement of cash flows using the indirect method,which of the following items are added to net income?

Accepted Answer

A) decrease in accrued expenses 
B) gain on sale of long-term assets 
C) bad debt expense 
D) increase in accounts receivable 
A) decrease in accrued expenses 
B) gain on sale of long-term assets 
C) bad debt expense 
D) increase in accounts receivable

Exam 6: Statements of Financial Position and Cash Flows and the Annual Report

The return on equity for Matthews Corporation is ________.

Presented below are activities from Prosser Industries,Inc. Required: Please indicate whether each of these activities is classified as an (O)perating,(I)nvesting,or (F)inancing Activity on the statement of cash flows.

Which of the following is considered an financing activity when preparing the statement of cash flows?

Which of the following topics is not required by the Securities and Exchange Commission to be included in the Management Discussion and Analysis section?

There is an inverse relationship between a company's solvency level and risk of default.

Explain the difference between the direct and indirect methods of preparing the operating section of the statement of cash flows.Which method is preferred by GAAP?

Cash flows from investing activities are ________.

Redemption of bonds payable is classified as a financing activity on the statement of cash flows.

What is total stockholders' equity for San Marcos Corporation?

Presented below are the comparative balance sheets and income statement for Pierce Manufacturing Corporation (in $ Million)for the year ended December 31,Year 2: Prepare the operating section of the statement of cash flows using the direct method and a reconciliation using the indirect method.

When using the direct method,losses on the sale of long-term assets are added to net income in the operating activities section.

If a subsequent event relates to a condition that existed at the balance sheet date,then the financial statements should be adjusted.

What are total liabilities for San Marcos Corporation?

The debt to equity ratio for Teague Industries is ________.

The return on assets for Matthews Corporation is ________.

The statement of cash flows enables financial statement users to do all of the following except ________.

The debt to equity ratio for Matthews Corporation is ________.

The first footnote in a set of financial statements is usually a Summary of Significant Accounting Policies.

When preparing a the operating section of the statement of cash flows using the indirect method,which of the following items are added to net income?

The Financial Reporting Environment

Financial Reporting Theory

Judgment and Applied Financial Accounting Research

Review of the Accounting Cycle

Statements of Net Income and Comprehensive Net Income

Accounting and the Time Value of Money

Revenue Recognition

OL: Revenue Recognition

Short-Term Operating Assets: Cash and Receivables

Short-Term Operating Assets: Inventory

Long-Term Operating Assets: Acquisition, cost Allocation, and Derecognition

Long-Term Operating Assets: Departures From Historical Cost

Operating Liabilities and Contingencies

OL: Operating Liabilities and Contingencies

Financing Liabilities

Accounting for Stockholders Equity

Investing Assets

Accounting for Income Taxes

Accounting for Employee Compensation and Benefits

Earnings Per Share

Accounting Corrections and Error Analysis

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