accounting final part 2

which statement is true to the FASB's position on the presentation of the statement of cash flows?

... BUT most combined use the INDIRECT method

a $1,000 bond that sells for 104 has a selling price of

1,040

extraordinary items are found on the income statement

AFTER discontinued operations

in a statement of cash flows, cash transactions are classifies into 3 major categories. Which of the following is not one of these 3 categories?

MANAGING activities

in a statement of cash flows, collections of accounts receivable are classified as:

OPERATING activities

in the statement of cash flows, the purchase of supplies is classified as

OPERATING activities

which of the following is an investing activity

Purchase of equipment

a prior period adjustment is a correction made to:

Retained earnings of the beginning of the period.

peak pricing charges :

a HIGHER price when demand is HIGH and a LOWER price when demand is LOW

the entry to record the issuance of common stock at a price above its par value includes:

a credit to additional paid-in capital: common stock

which of the following would be classified as an extraordinary item?

a loss from an enacted law that made inventory unsalable

the advantages of corporations going public include all of the following except:

ability to remove assets

stock splits:

allow management to conserve cash, give stockholders more shares, cause no change in total assets, liabilities, or stockholder's equity

the present value of an amount is:

always less than the future value

treasury stock appears as:

an EQUITY account

which of the following statistics is generally computed for both common and preferred stock?

annual dividend per share

commitments, such as contracts for future transactions:

are footnoted in financial statements, if material

in a statement of cash flows, the term cash includes:

bank accounts, cash on hand, and cash equivalents

which method will yield the higher cash flows from financing activities

both direct and indirect methods will yield the same amount

the ownership of common stock in a corporation usually carries the following rights?

both to vote for directors and share in a distribution of assets if the corporation is to be liquidated

a primary disadvantage of the corporate of organization is:

corporate earnings are subject to double taxation

which of the following ratios and rates that measure debt-paying ability focuses on the long-term position of a company?

debt ratio

deferred taxes are classified as:

either an asset/liability, depending upon the situation

to receive the next cash dividend, an investor must purchase the stock before the

ex-dividened date

of the items listed, which would appear closest to the bottom of the income statement

extraordinary items

in a statement of cash flows, payment of dividends are classified as

financing activities

a cash dividend paid to stockholders is reported on the

financing activities section of the statement of cash flows :

which of the following does not appear in a corporate income statement

gains and losses from treasury stock transactions

when using the indirect method, depreciation expense

increases net cash flow from operations

which of the following is not classified among the investing actives in a statement of cash flows

investment of cash made in the business by the owners

an opening lease:

is a form of off-balance sheet financing

all of the following are financing activities except:

lending money

the price-earnings ratio is the:

market price divided by book value of a share of stock

all of the following are considered cash equivalents except

marketable securities

the statement of stockholders equity

may be issued as a substitute for the statement of retained earnings

dividends become a liability of a corporation

on the date the board of directors declares the dividend

free cash flow arises out of:

operating activities

the interest coverage ratio is computed by dividing

operating income by interest expense

Shares that have been sold and are in the hands of stockholders are called:

outstanding

which of the following doesn't create a difference between net income and the net cash flow from operations?

payment of a cash dividend

which of the following is a financing activity

payment of dividends

which of the following is not classified among the financing actives in a statement of cash flows?

payment of interest to creditors

which of the following is not classified among the operating activities in a statement of cash flows

payment of the PRINCIPLE amount owed on a bank loan

if a bond is selling at 103, it is selling at:

premium

which of the following would usually be the greatest amount:

shares AUTHORIZED

in a corporation's organization start, which has/have the highest position?

stockholders

the amount of the present value of a future cash receipt will depend upon:

the amount of money to be received, the length of time until the money is recieved, and the required rate of return

the "bottom line" in a statement of cash flows shows:

the cash (including cash equivalents) on the balance sheet at the end of the period

dividends are the first recorded and retained earnings are reduced on:

the date of DECLARATION

In computing earnings per share, the number of shares used is:

the weighted average of shares outstanding for the year

which of the following apply to closey held corporations?

there is no organized market for buying and selling the company's shares

the rights of a common stockholder do not include the right:

to withdraw a share of corporate net assets proportionate to the person's stockholdings

the net assets of a corporation are equal to

total assets - total liabilities

stock that had been issued by a corporation, and later reacquired, is classified as:

treasury stock

most preferred stocks have one or more of the following characteristics, expect

voting rights