Question 1

Unsecured debt consists of ________.

Accepted Answer

A) debentures 
B) mortgage bonds 
C) preferred stock 
D) common stock 
A) debentures 
B) mortgage bonds 
C) preferred stock 
D) common stock

Question 2

The indirect and direct methods of preparing the statement of cash flows show the same amount of net cash provided by operating activities.

Accepted Answer

A) True 
 B)False

Question 3

When reconciling net income to net cash provided by operating activities,a(n)________ is a deduction from net income.

Accepted Answer

A) decrease in inventories 
B) increase in unearned revenues 
C) decrease in prepaid rent 
D) decrease in accounts payable 
A) decrease in inventories 
B) increase in unearned revenues 
C) decrease in prepaid rent 
D) decrease in accounts payable

Question 4

The statement of changes in stockholders' equity shows the changes in ________.

Accepted Answer

A) retained earnings only 
B) dividends only 
C) each of the stockholders' equity accounts 
D) fixed assets only 
A) retained earnings only 
B) dividends only 
C) each of the stockholders' equity accounts 
D) fixed assets only

Question 5

FIFO uses the ________ costs to measure the ending inventory.

Accepted Answer

A) latest 
B) earliest 
C) average 
D) weighted-average 
A) latest 
B) earliest 
C) average 
D) weighted-average

Question 6

The income statement and comparative balance sheets for SSS Company are presented below:
       Total liabilities and
   Required:
Prepare a statement of cash flows using the indirect method for the year ended December 31,2015.No land was sold in 2015.Land was purchased using bonds payable for $8,000 and cash for $2,000.A fixed asset was sold in 2015 for $4,100.

Accepted Answer

@#IMG-DLM& Cash flows from operating act

Question 7

The account Unearned Revenue is a revenue account.

Accepted Answer

A) True 
 B)False

Question 8

Lopez Company's income statement reported income tax expense of $18,000.Income tax payable at the beginning of the year was $1,000.Income tax payable at the end of the year was $4,000.The cash paid for taxes was ________.

Accepted Answer

A) $15,000 
B) $17,000 
C) $21,000 
D) $22,000 
A) $15,000 
B) $17,000 
C) $21,000 
D) $22,000

Question 9

In periods of inflation,the ________ method of inventory valuation provides a more realistic net income.

Accepted Answer

A) LIFO 
B) FIFO 
C) average cost 
D) weighted-average cost 
A) LIFO 
B) FIFO 
C) average cost 
D) weighted-average cost

Question 10

Today Corporation reports the following data:   Depreciation expense for the year ending December 31,2012 is $27.The company sold a fixed asset for $10 cash on December 1,2012.The cost of the fixed asset sold was $20 and the accumulated depreciation on the fixed asset sold was $10.What is the net cash flow from investing activities for the year ending December 31,2012?

Accepted Answer

A) $241 cash outflow 
B) $251 cash outflow 
C) $261 cash outflow 
D) $271 cash outflow 
A) $241 cash outflow 
B) $251 cash outflow 
C) $261 cash outflow 
D) $271 cash outflow

Question 11

The balance sheet usually shows cash equivalents at cost or market price,whichever is higher.

Accepted Answer

A) True 
 B)False

Question 12

The deferred tax account can only be a liability.

Accepted Answer

A) True 
 B)False

Question 13

Nonoperating items on a multiple-step income statement include interest expense and interest income.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following statements about the cash flow statement is FALSE?

Accepted Answer

A) The cash flow statement shows the relationship between net income and changes in the cash balance. 
B) The cash flow statement determines a company's ability to pay its debts when they are due. 
C) The cash flow statement is an aid to predicting future cash flows. 
D) The cash flow statement can be used to evaluate the honesty of management in carrying out daily activities. 
A) The cash flow statement shows the relationship between net income and changes in the cash balance. 
B) The cash flow statement determines a company's ability to pay its debts when they are due. 
C) The cash flow statement is an aid to predicting future cash flows. 
D) The cash flow statement can be used to evaluate the honesty of management in carrying out daily activities.

Question 15

An example of a noncash transaction on the statement of cash flows is the purchase of equipment with a long-term note payable.

Accepted Answer

A) True 
 B)False

Question 16

Research and development costs are expensed when incurred for financial statement purposes.

Accepted Answer

A) True 
 B)False

Question 17

Listed below are selected accounts for Spence Corporation:   For the year ended December 31,2011,net income was $42,000 and depreciation expense was $0.The net cash provided by operating activities for the year ending December 31,2011 was ________.Assume the indirect method is used.

Accepted Answer

A) $(67,000) 
B) $15,000 
C) $69,000 
D) $109,000 
A) $(67,000) 
B) $15,000 
C) $69,000 
D) $109,000

Question 18

For the year ending December 31,2012,Maydak Company reports net income of $23,000 and depreciation expense of $17,000.The income tax expense for the year ending December 31,2012 is $20,000.The following data is available:   What is the net cash provided by operating activities for the year ended December 31,2012? Assume the indirect method is used.

Accepted Answer

A) $0 
B) $40,000 
C) $68,000 
D) $89,000 
A) $0 
B) $40,000 
C) $68,000 
D) $89,000

Question 19

Hollander Company gave a long-term note payable in the amount of $285,000 to acquire a new piece of equipment.This transaction will be reported on the statement of cash flows as a ________.

Accepted Answer

A) investing activity 
B) financing activity 
C) investing and financing activity 
D) noncash transaction 
A) investing activity 
B) financing activity 
C) investing and financing activity 
D) noncash transaction

Question 20

Analysts focus on free cash flow from the statement of cash flows.

Accepted Answer

A) True 
 B)False

Unsecured debt consists of ________.

The indirect and direct methods of preparing the statement of cash flows show the same amount of net cash provided by operating activities.

When reconciling net income to net cash provided by operating activities,a(n)________ is a deduction from net income.

The statement of changes in stockholders' equity shows the changes in ________.

FIFO uses the ________ costs to measure the ending inventory.

The account Unearned Revenue is a revenue account.

Lopez Company's income statement reported income tax expense of $18,000.Income tax payable at the beginning of the year was $1,000.Income tax payable at the end of the year was $4,000.The cash paid for taxes was ________.

In periods of inflation,the ________ method of inventory valuation provides a more realistic net income.

The balance sheet usually shows cash equivalents at cost or market price,whichever is higher.

The deferred tax account can only be a liability.

Nonoperating items on a multiple-step income statement include interest expense and interest income.

Which of the following statements about the cash flow statement is FALSE?

An example of a noncash transaction on the statement of cash flows is the purchase of equipment with a long-term note payable.

Research and development costs are expensed when incurred for financial statement purposes.

Listed below are selected accounts for Spence Corporation: For the year ended December 31,2011,net income was $42,000 and depreciation expense was $0.The net cash provided by operating activities for the year ending December 31,2011 was ________.Assume the indirect method is used.

Hollander Company gave a long-term note payable in the amount of $285,000 to acquire a new piece of equipment.This transaction will be reported on the statement of cash flows as a ________.

Analysts focus on free cash flow from the statement of cash flows.

Managerial Accounting, the Business Organization

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding and Analyzing Consolidated Financial Statements

Filters

Exam 16: Understanding Corporate Annual Reports: Basic Financial Statements

Unsecured debt consists of ________.

The indirect and direct methods of preparing the statement of cash flows show the same amount of net cash provided by operating activities.

When reconciling net income to net cash provided by operating activities,a(n)________ is a deduction from net income.

The statement of changes in stockholders' equity shows the changes in ________.

FIFO uses the ________ costs to measure the ending inventory.

The account Unearned Revenue is a revenue account.

Lopez Company's income statement reported income tax expense of $18,000.Income tax payable at the beginning of the year was $1,000.Income tax payable at the end of the year was $4,000.The cash paid for taxes was ________.

In periods of inflation,the ________ method of inventory valuation provides a more realistic net income.

The balance sheet usually shows cash equivalents at cost or market price,whichever is higher.

The deferred tax account can only be a liability.

Nonoperating items on a multiple-step income statement include interest expense and interest income.

Which of the following statements about the cash flow statement is FALSE?

An example of a noncash transaction on the statement of cash flows is the purchase of equipment with a long-term note payable.

Research and development costs are expensed when incurred for financial statement purposes.

Listed below are selected accounts for Spence Corporation: For the year ended December 31,2011,net income was $42,000 and depreciation expense was $0.The net cash provided by operating activities for the year ending December 31,2011 was ________.Assume the indirect method is used.

Hollander Company gave a long-term note payable in the amount of $285,000 to acquire a new piece of equipment.This transaction will be reported on the statement of cash flows as a ________.

Analysts focus on free cash flow from the statement of cash flows.

Managerial Accounting, the Business Organization

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding and Analyzing Consolidated Financial Statements

Filters