Accounting 203 Final- Chapter 11,12 & 5 Quiz Q

When a company uses the direct method to determine the net cash flows from operating activities, the net cash flows from operating activities will:

be identical to the amount reported using the indirect method.

On the payment date for a cash dividend, the company:

debits Dividends Payable and credits Cash for the dividend amount.Correct

Dividends Payable is recorded as a credit on the:

declaration date.

Advantages of equity financing over debt financing include that:

equity financing does not require repayment.

An attempt to deceive others for personal gain is known as:

fraud.

The fraud triangle contains three elements that must exist for accounting fraud to occur. The elements are:

incentive, opportunity, and rationalization.

NSF checks from customers should be a(n) ______ on a bank reconciliation.

subtraction from the book balance

If a corporation declares and distributes a stock dividend on its common shares:

the account Retained Earnings is decreased.

If the calculation of cash flows from operating activities starts with net income, the company:

will remove the effects of all noncash items included in the calculation of net income.

Which one of the following events would not require a journal entry on a corporation's books?

2-for-1 stock split

A corporate charter specifies that the company may issue up to 33 million shares of stock. The company sells 25 million shares to investors and later buys back 9.5 million shares. The current number of shares of treasury stock after these transactions have been accounted for is:

9.5 million shares.

Which of the following is correct about reissuing treasury stock?

A gain or loss on the reissuance of treasury stock is never recognized.

Which of the following would be included in cash flows from operating activities?

Cash received from customers.

Which of the following would be included in cash flows from investing activities?

Cash used to purchase equipment.

The par value of stock indicates what the stock is worth.

False

Which of the following statements best describes the reason Depreciation Expense is added to net income when preparing the statement of cash flows?

Depreciation expense originally reduced net income, but the expense does not involve a cash payment (outflow). Correct

Which of the following statements about issued and outstanding stock is correct?

Issued stock equals the sum of outstanding stock and treasury stock.

What does the par value of a stock represent?

It is a legal concept not related to the market value of a stock.

All of the following are a part of contributed capital except:

Retained Earnings.

Which of the following was passed by Congress in response to financial statement frauds that occurred in the early 2000s?

Sarbanes-Oxley Act

Issuing stock to obtain financing is called equity financing.

True

Treasury stock is a corporation's own stock that has been issued and subsequently repurchased by the corporation.

True