Accounting Final

The order of presentation of activities on the statement of cash flow is:

"Oh I Forgot" (operating, investing, financing)

Cash equivalent do not include:

2 yr certificate of deposit

Cash equivalents are generally investments with maturities of:

3 months or less

The acquisition of land by issuing common stock is:

A non cash transaction which is not reported in the body of a statement of cash flow.

Which of the following would not be considered a motive for making a stock investment in another corporation?

Appreciation in the market value of the stock investment

Free cash flow equals cash provided by:

Cash provided by operating activities - capital expenditures- cash dividends

Investing activities include:

Collecting cash on loans made

If the cost method is used to account for a long-term investment in common stock, dividends received should be:

Credited to the dividend revenue (in notes)

If a company acquires a 40% common stock interest in another company:

Equity method

In accounting for stock investments between 20% and 50%, the ______ method is used.

Equity method

Which one of the following would not be classified as a short-term investment?

Equity method investment

Corporations invest excess cash for short periods of time in each of the following except:

Equity securities

An unrealized gain or loss on trading securities is reported as a separate component of stockholder's equity.

False

Cash provided by operations is generally equal to operating income?

False

A company may purchase a non-controlling interest in another firm in a related industry:

For strategic reasons

Each of the following would be reported under operating activities except cash receipts:

From sales of investments

Corporations invest in other companies for all of the following reasons except to:

Increase trading of the other companies stock

When a company holds stock of several different corporations, the group of securities is identified as a(n):

Investment portfolio

Land acquired from the issuance of common stock is reported:

Is a separate schedule at the bottom of the statement

Financing activities involve:

Issuing debt

If an investor owns less than 20% of the common stock of another corporation as a long-term investment:

It is presumed that the investor has significant influence on the investee

Financing activities involve:

Long term liability and owners' equity items

Available-for-sale securities are classified as:

Long-term investments only

.Generally the most important category of the statement of cash flow iscash flow from:

Operating activities

The best measure of a company's ability to generate sufficient cash to continue as a going concern is net cash provided by?

Operating activities

In addition to 3 basic financial statements, which of the following is also a required financial statement?

Statement of cash flow

If 10% of the common stock of an investee company is purchased as a long-term investment, the appropriate method of accounting for the investment is:

The Cost method

Revenue is recognized when cash dividends are received under:

The cost method

Under the equity method of accounting for long-term investment in common stock, when a dividend is received from the investee company:

The stock investment account is decreased (credited). Stock investment account is an asset that's why it's decreased and credited.

The statement of cash flow will not provide insight into:

how the retirement of debt is accomplished

The statement of cash flows:

is used to asses an entity's ability to pay dividends and meet obligations.

Which of the following transactions would not be classified as a financing activity:

purchase of a long-term investment in bonds