Financial Accounting Final
The PE ratio
tends to be higher for growth stocks
Suppose that Nueman Exploration Tours has filled a lawsuit against a competitor for an alleged trademark violation.
$0
A company issues 100,000 shares of $1 par value common stock for $17 per share. To record this transaction, the company would credit Additional Paid-in Capital for:
$1,600,000
Snow Company has the following inventory transactions for the year: Assuming Snow sells 1,000 units, calculate ending inventory under FIFO
$1,800
A company issues 100,000 shares of $1 par value common stock for $17 per share. To record this transaction, the company would credit Common stock for:
$100,000
The Open Grill incurred the following costs in acquiring a new piece of land:
$100,800
in the first three years of operations, a company has net income of $2,000; $5,000; and $8,000.
$11,000
Which of the following intangible assets are not amortized?
Goodwill
Treasury Stock
decreases stockholders' equity
Operating income is defined as:
gross profit minus operating expenses
The purchase of supplies with cash would be recorded as:
Debit Supplies; Credit Cash
Equipment was purchased for $50,000. At the time, the equipment was expected to be used eight years and have a residual value of $10,000. In the first two years of operation, the equipment was used 2,700 hours and 3,300 hours, respectively. What is the equipment's accumulated depreciation at the end of the second year using the activity-based method?
$16,000
A local Starbucks sells gift cards of $10,000 during the year. By the end of the year, customers have redeemed $8,000 of gift cards. What will be the year-end balance in the Deferred Revenue account?
$2,000
On April 1, 2021, Nelsen Inc. accepts a $100,000, 8% note. The note receivable and interest are due on March 31, 2022 (one year later). Assuming Nelsen Inc. had a December 31 year-end, on March 31, 2022, Nelsen Inc. will record interest revenue of:
$2,000
At the beginning of 2021, a company issues 100,000 shares of 4%, $10 par value, cumulative preferred stock.
$20,000
A company has following three assets with in the information provided:
$3 million
Aviation Systems sells its products with a three-year manufacturing warranty. The company's sales revenue is $600,000. Based on prior experience, the company estimates that warranty costs are 5% of sales revenue. Actual warranty costs related to these sales were $5,000 during the year. How much warranty expense should the company record this year?
$30,000
Snow Company has the following inventory transactions for the year: Assuming Snow sells 1,000 units, calculate ending inventory under LIFO
$4,350
On August 4, Sanders provides services to Frederickson for $5,000, terms 3/10, n/30. Frederickson pays for the services on August 12. What is the amount of net revenues (total minus sales discounts) as of August 12?
$4,850
Suppose a company declares a dividends of $0.50 per share.
$45,000
If Executive Airways borrows $10 million on April 1, 2021, for one year at 6% interest, how much interest expense does it record for the year ended December 31, 2021?
$450,000
At the end of its first year of operations, a company establishes an allowance for future uncollectible accounts for $5,600. At what amount would bad debt expense be reported in the current year's income statement?
$5,600
At the end of the previous year, a company's balance sheet reports cash of $30,000. For the current year, the company's statement of cash flows reports operating cash inflows of $90,000; investing outflows of $110,000; and financing inflows of $40,000. What amount of cash will be reported in the current year's balance sheet?
$50,000
On October 1, a franchise was purchased for $2,000,000. The franchise agreement is for 10 years. What is the amount of amortization expense by the end of the first year, December 31 (using partial year straight-line amortization)?
$50,000
The Cheese Factory incurred the following costs related to acquiring a new piece of equipment:
$59,000
Nija Incorporated reports the following aging schedules of its accounts receivables with the estimated percent uncollectible. What is the total estimate of uncollectible accounts using the aging method?
$6,400
The original cost of a piece of equipment was $100,000. The equipment was depreciated using the straight-line method with annual depreciation of $20,000. After two years, the fair value of the equipment is $82,000. How much is the book value of the equipment at the end of the second year?
$60,000
Byer Co. purchases all of the assets and liabilities of Stellar Co. for $1,500,000. The fair value of Stellar's assets is $2,000,000, and its liabilities have a fair value of $1,200,000. The book value of Stellar's assets and liabilities are not known. For what amount would Bryer record goodwill associated with the purchase?
$700,000
Equipment was purchased for $50,000. At the time, the equipment was expected to be used eight years and have a residual value of $10,000. The company uses straight-line depreciation. At the beginning of the third year, the company changed its estimated useful life to a total of six years(four years remaining) and the residual value to $8,000. What is depreciation expense in the third year?
$8,000
On September 1, Bates Supplies borrows $30,000 from Vines Incorporated by signing an 8% note due in 12 months. Calculate the amount of interest revenue Vines will record on December 31, four months after the note is issued.
$800
Use the information below to calculate net revenues
$91,000
For the year, Sealy Incorporated reports net sales of $50,000, cost of goods sold of $40,000, and an average inventory balance of $5,000. What is Sealy's gross profit ratio?
20%
Petite Fashions issued 500,000 of its 2 million shares of authorized common stock. At the end of the accounting period, 450,000 shares are outstanding. How many shares of treasury stock does Petite Fashions have?
50,000 shares
At the beginning of the year, Dawnetta Fashions has total accounts receivable of $300,000. By the end of the year. Dawnetta reports total credit sales of $1,500,000 and total accounts receivables of $200,000. What is the receivables turnover ratio for Dawnetta Fashions?
6.0
A company has a profit margin of 10% and reports net sales of $4,000,000 and average total assets of $5,000,000. Calculate the company's return on assets.
8.0%
A company issues 100,000 shares of 5%, $10 par value preferred stock for $17 per share. The entry to record this transaction would include:
A credit to Preferred Stock for $1,000,000.
The entry to record the estimate for uncollectible accounts includes:
A debit to Bad Debt Expense
When a customer pays in advance for a product or service, the advance payment received by the company is recorded as:
A debit to an asset and a credit to a liability account
Equipment originally costing $100,000 has accumulated depreciation of $65,000. If it is sold for $40,000, the company should record:
A gain of $5,000
Equipment originally costing $65,000 has accumulated depreciation of $25,000. If it sells the equipment for $30,000, the company should record:
A loss of $10,000
Which of the following is properly recorded as an intangible asset?
A purchased patent
The effect of writing off a specific account receivable is:
A reduction in the Allowance for Uncollectible Accounts
Which of the following represents a characteristic of a liability?
All of these are characteristics of a liability.
All transactions related to a particular item over a period of time are summarized in a(n):
Account
A debit is used to decrease which of the following accounts?
Accounts Payable
When employee expenditures with company-issue credit cash are recorded:
Accounts Payable is credited
The amount of cash owed to the company by its customers from the sale of products or services on account is known as:
Accounts Receivable
When a company provides services on account, which of the following accounts is debited?
Accounts Receivable
Recording salaries owed to employees that will not be paid by the company until the following accounting period is an example of a(n):
Accrued expense
Financial statements are prepared from which of the following trial balance?
Adjusting trial balance
A trial balance can best be explained as a list of
All accounts and their balances at a particular date.
Fraudulent reporting by management could include
All of the answers choices are correct
A company's ratio of cash to noncash assets provides some indication of the company's ability to:
All of the choices are correct
Which of the following is considered cash for financial reporting purposes?
All of the choices are correct.
Which of the following could cause a company to have a high ratio of cash to noncash assets?
All of the factors could contribute to a high ratio to noncash assets
Over the entire service life of an asset, which depreciation method records the highest total depreciation?
All of the methods result in the same total depreciation
Which of the following is a characteristic of adjusting entries?
Allows for proper application of revenue recognition principle (revenues) or expenses recognition.
Which of the following expenditures should be recorded as an asset?
An addition which increases future benefit.
Which of the following is not a current liability?
An unused line of credit
Allied Partners filed a suit against Big Sky Inc. seeking damages for patent infringement.
As a liability for $500,000 with disclosure of range
A company's petty cash refers to:
Cash on hand to pay for minor purchases
Financing cash flows include which of the following?
Cash received from the issuance of common stock.
Investing cash flows include which of the following?
Cash received from the sale of a used company truck.
A list of all account names used to record transactions of a company is referred to as a:
Chart of accounts
A sales discount is recorded by the seller as a(n):
Contra revenue
Sarbanes-Oxley Act (SOX) was passed in response to:
Corporate scandals involving unethical behavior of top executives.
Under a perpetual inventory system:
Cost of goods sold is recorded with each sale
A long-term asset is recorded at the:
Cost of the asset plus all costs necessary to the asset ready for use.
Provide service to customers for cash would be recorded with a:
Credit to Service Revenue
Which of the following is reported as a current liability?
Current portion of long-term debt
The payment for utilities of the current month would be recorded as:
Debit Utilities Expense; Credit Cash.
Chan Sports purchases one year of rent on November 1 for $12,000 ($1,000 per month), debiting Prepaid Rent. On December 31, Chan Sports would record the following year-end adjusting entry:
D: Rent Expense - 2,000; C: Prepaid Rent - 2,000.
Using a period inventory system, recording the sale of inventory on account would include:
Debit Accounts Receivable; credit Sales Revenue.
A company provides services to a customer in the current year and then determines in the following year that the customer's account needs to be classified as uncollectible. If the company uses the direct write-off method, which of the following would be recorded in the following year at the time of the write-off?
Debit Bad Debt Expense
Travel Planners, Inc, borrowed $5,000 from First State Bank and signed a promissory note. What entry should Travel Planners record?
Debit Cash, $5,000; Credit Notes Payable $5,000
Travel Planners, Inc, borrowed $5,000 from First State Bank and signed a promissory note. What entry should First Bank record?
Debit Notes Receivable, $5,000; Credit Cash $5,000
on the date of dividend declaration, which of the following entries is recorded?
Debit dividends; credit dividends payable
On November 1, 2021, a company signed a $200,000 12% six-month note payable within the amount borrowed plus accrued interest due six months later on May 1, 2022. The company should report the following adjusting entry at December 31,2021:
Debit interest expense and credit interest payable, $4,000
The entry to write down inventory from cost to net realizable value at the end of the year includes a:
Debit to Cost of Goods Sold
The adjusting entry to record supplies used during the period includes a:
Debit to Supplies Expense
The purchase of supplies on account would be recorded with a:
Debit to Supplies.
On December 10, a company pays $500 for advertising to appear on December 20. On which date should the expense be recorded under cash-basis accounting?
December 10.
On December 10, a company pays $500 for advertising to appear on December 20. On which date should the expense be recorded under accrual-basis accounting?
December 20
When treasury stock is purchased, what is the effect on total shareholders' equity?
Decrease
A debit to Salaries Expense will:
Decrease stockholders' equity
Which of the following adjusts the bank's balance of cash in a bank reconciliation?
Deposits outstanding
Management can estimate the amount of loss that will occur due to litigation against the company. If the likelihood of loss is reasonably likely, a contingent liability should as:
Disclosed but reported as a liability
Preferred stock is called preferred because is usually has two preferences over common stock. These preferences related to:
Dividends and distribution of assets if the corporation is dissolved.
Section 404 of the Sarbanes-Oxley Act requires companies to:
Document and assess internal controls.
Which of the following depreciation method typically results in the highest depreciation expense during the first year of an asset's life?
Double declining balance method.
Which of the following increase an employer's payroll costs?
Employer's FICA contribution
Which of the following generally would be considered a good internal control over cash payments?
Ensure checks are serially numbered and signed only by authorized employees.
Which of the following is paid by both the employee and and the employer?
FICA taxes
Which cost flow assumption generally results in the highest reported amount of net income in period of rising inventory costs?
FIFO
The Sarbanes-Oxley Act of 2002 applies to all companies that:
File reports with the Securities and Exchange Commission
Under the allowance method for uncollectible accounts, the balance of Allowance for Uncollectible Accounts increase when:
Future bad debts are estimated
After the closing entries are posted to the accounts, all temporary accounts:
Have zero balances
Given the items below, which of the following is an addition to net income to arrive at operating cash flows using the indirect method?
I and III
Given the items below, which of the following is a subtraction from net income to arrive at operating cash flows using the indirect method?
II only
The revenue recognition principle states that companies typically record revenue:
In the period in which we provide goods and services to customers.
Under cash-basis accounting, companies typically record revenue:
In the period in which we received cash from the customer for goods and services.
Under the direct write-off method, uncollectible accounts are recorded:
In the period the account is determined actually uncollectible
Assuming a current ratio of 1.0 and an acid ratio-test of 0.75, how will the borrowing of cash to be paid back in five years affect each ratio?
Increase the current ratio and increase the acid-test ratio
Which of the following expenditures should be recorded as an asset?
Interest costs during the construction period of a new building
Fan Company purchasing inventory on account. The entry to record this purchase using a perpetual inventory system would include a debit to:
Inventory
Which of the following is not included in calculating the acid-test ratio?
Inventory
Which of the following is not a characteristic of a liability?
It must be payable in cash
Inventory is defined as:
Items a company intends for sale to customers.
Transactions are recorded using debits and credits in a(n):
Journal
Which inventory cost flow assumption generally result in the lowest reported amount for inventory when inventory costs are rising?
Last-in, fist-out (LIFO)
In the language of accounting, the term "debit" always means
Left-hand side
Federal and state income taxes withheld by employee's payroll are initially recorded with a credit to a(n):
Liability
Which of the following statements is true?
Losses on the sale of long-term assets are an adjustment reported in the operating activities section of statement of cash flows under the indirect method
Closing entries are:
Made to transfer the balances of temporary accounts to retained earnings.
On May 5, Johnson Plumbing receives a phone call from a customer needing a new water heater and schedules a service visit for May 7. On May 7, Johnson installs the new water heater. The customer pays for services on May 10. Under cash-basis accounting, on which date should Johnson record service revenue?
May 10 (date of cash receipt).
On May 5, Johnson Plumbing receives a phone call from a customer needing a new water heater and schedules a service visit for May 7. On May 7, Johnson installs the new water heater. The customer pays for services on May 10. According to the revenue recognition principle, on which date should Johnson record service revenue?
May 7 (date of service)
Which of the following describes the information reported in the statement of cash flows?
Net cash flows from operating, investing, and financing activities.
return on equity is calculated as:
Net income divided by average stockholders' equity
Which of the following describes the information reported in the income statement?
Net income for the period calculated as revenues minus expenses.
Which of the following describes the information reported in the income statement?
Net income for the period is calculated by subtracting expenses from revenues
Purchasing office supplies on account for $100 is recorded as:
Option a
Which of the following expenditures should be recorded as an expense?
Ordinary repairs and maintenance
The correct order from the smallest number of shares to the largest number of shares is:
Outstanding, issued, and authorized
An exclusive 20-year right to manufacture a product or use a process is a:
Patent
Operating cash flows would include which of following?
Payment for prepaid insurance.
Which of the following represents an external transaction?
Payment of utility bill
Corporate executives accountability under the Sarbanes-Oxley Act requires corporate executives to:
Personally certify the company's financial statements.
Which of the following is an example of an accrued revenue?
Providing services to a customer without having yet collected the cash.
Fan company purchases inventory on account. The entry to record this purchase using a periodic inventory system would include a debit to:
Purchases
Which of the following is not a characteristic of adjusting entries?
Reduce the balances of revenue, expense, and dividend accounts to zero.
Which of the following is not recorded as an intangible asset in the balance sheet?
Research and development.
The company's profitability on each dollar invested in assets is represented by which of the following ratios:
Return on assets
Which of the following accounts is not listed in a post-closing trail balance?
Salaries Expense
Which of the following accounts is listed in a post-closing trail balance?
Salaries Payable
Which of the following refers to the seller reducing the customer's balance owed because of some deficiency in the company's product or service?
Sales Allowance
The seller collects sales taxes from the customers at the time of sale and reports the sale taxes as:
Sales tax payable
A multiple-step income statement provides the advantage of:
Separating revenue and expense based on their different type of activities.
On September 9, Clearmore Services receives a request for services from a customer. The service is schedules for September 15. On September 15, the services is provided, and the customer pays one week later on September 22. Using cash-basis accounting, on which date should Clearmore Services record service revenue?
September 22 (date of cash receipt).
A credit is used to increase which of the following accounts?
Service Revenue
Which of the following accounts normally has a credit balance?
Service Revenue
Which of the following generally would be considered good internal control of cash disbursements?
Set maximum purchase limits on debit cards and credit cards.
When preparing a bank reconciliation, outstanding checks would be:
Subtracted from the bank's cash balance
When preparing a bank reconciliation, nonsufficient funds (NSF) checks would be:
Subtracted from the company's cash balance.
statement of stockholders' equity
Summarizes the changes in the balance in each stockholders' equity account over a period of time
Which of the following represents the balance of Cost of Goods Sold at the end of the year?
The cost of inventory sold during the year.
Which of the following is true in comparing the current ratio with the acid-test ratio?
The current ratio will always be at least as large as the acid-test ratio
Consistent with the COSO framework, an effective internal control system includes the control environment. The control environment refers to:
The ethical tone set by top management.
Which of the following statement is true regarding the amortization of intangible assets?
The expected residual value of most intangible assets is zero
Which of the following shows a chronological record of all transactions?
The general journal
Which of the following shows a chronological record of all transactions?
The general journal.
Interest expense is recorded in the period in which
The interest is incurred
In a classified balance sheet, liabilities are separated into two categories base on
The length of time until the obligation is expected to be satisfied-less than one year versus more than one year.
The receivables turnover ratio is a measure of:
The number of times during a year that the average accounts receivables balance is collected.
A company's inventory turnover ratio measures:
The number of times the company sells its average inventory balance during the year.
If a company uses the allowance method of accounting for uncollectible accounts and collects cash on an account receivable previously written off:
There is no change in total assets
A company resells 10,00 shares of treasury stock for $22 per share. The stock was purchased in a previous year for $18 per share. By how much would net income be affected by the sale of this treasury stock?
There would be no effect on net income from the sale of treasury stock
The primary reason the balances of cash in the company's record will differ from the balance of cash in the bank's records includes:
Timing differences of recording cash transactions by the company and by the bank.
What is a direct purpose of internal controls?
To improve the accuracy and reliability of accounting information.
Which of the following is true about a trial balance?
Total debit amounts should always equal total credit amounts
Which of the following describes the closing process:
Transfer the balances of temporary accounts (revenues, expenses, and dividends) to retained earnings.
Which of the following correctly describes a list of accounts and their balances, showing that total debits equal total credits?
Trial balance
If company understates its ending inventory in the current period, what effect will have on cost of goods sold in the following period?
Understate cost of good sold.
Suppose Windell Corporation understates its ending inventory amount. What effect will this have on the reporting amount of net income in the year of the error?
Understate net income
Under the direct write-off method, the balance of the accounts receivables account is reduced:
When an account is proven uncollectible
a stock dividend occurs when:
a company distributes to shareholders additional shares of its own stock
which of the following best describes a company with a high price-earnings ratio?
a company whose earnings are expected to grow
which of the following is not correct about the statement of cash flows
a company with a net loss on the income statement will always have a net cash outflows from operating activities
An accumulation deficit is
a debit balance in retained earnings
declaring a cash dividend has what effect on total stockholders' equity?
a decrease in total
In preparing a statement of cash flows under the indirect method, and increase in accounts payable would be reported as a(n):
addition to net income in the operating activities section
in preparing a statement of cash flows under the indirect method, a decrease in accounts receivable would be reported as a(n):
addition to net income in the operating activities section
retained earnings represent:
all net income, less all dividends, since the company began operations
Net income is defined as:
all revenues minus all expenses
Depreciation in accounting is the:
allocation of an asset's cost to an expense over time
the indirect and direct methods
are two allowable methods to present operating activities in the statement of cash flows
The book value of an asset is equal to the:
asset's cost less accumulated depreciation
the correct order from the largest number of shares to the smallest number of shares is
authorized, issued and outstanding
cash flows from investing activities do no include cash flows from:
borrowing
financing activities would include cash paid for:
both dividends to stockholders and the purchase of treasury stock
preferred stock
can have features of both liabilities and stockholders equity
cash flows from financing activities include:
cash dividends paid
which of the following is not correct about the statement of cash flows?
cash dividends paid are classified as cash flows from operating activities
which of the following is correct about the statement of cash flows
cash dividends received on stock investments are classified as cash flows from operating activities
we can separate cash return on assets into:
cash flows to sale and asset turnover
cash flows from investing activities include:
cash outflows from acquiring land
which of the following items is reported in the operating section of cash flows using the direct method?
cash received from customers
The acid-test ratio is:
cash, current investments, and accounts receivable divided by current liabilities
operating cash flows can be described as:
cash-basis net income
Accumulated depreciation is:
contra asset account
Suppose a company purchases 2,000 shares of its own $1 par value common stock for $16 per share. The company then resells 400 of these shares for $20 per share. Which of the following is recorded at the time of the resale?
credit additional paid-in capital for $1,600
a company issues 10,000 shares of 0.05 par value common stock for $25 per share. Which of the following is recorded at issuance?
credit common stock for $500
we can identify operating activities from income statement information and changes in:
current asset and current liabilities accounts
The current ratio:
current assets divided by current liabilities
cash dividends are initially recorded on which date?
date of declaration
suppose a company purchases 2,000 shares of its own $1 par value common stock for $16 per share. Which of the following is recorded at the time of the purchase?
debit treasury stock for $32,000
we credit dividends payable on
declaration date
Treasury stock is recorded as:
decrease stockholders' equity
which of the following is not subtracted from net income as an adjustment under the indirect method of preparing the statement of cash flows?
depreciation expense
which of the following items is not reported in the operating section of the statement of cash flows using the direct method?
depreciation expense
operating cash flows exclude:
dividends paid
the disadvantages of a corporation compared to a sole proprietorship or partnership include:
double taxation
which of the following is a publicly traded company
cash received from issuing common stock would be classified in which section of the socf?
financing
the purchase of treasury stock is classified in the statement of cash flows as a(n)
financing
under what section of the statement of cash flows would you classify dividends paid on common stock?
financing
the issuance of notes payable for borrowing is classified in the statement of cash flows as a(n):
financing activity
which of the following is subtracted from net income as an adjustment under the indirect method of preparing the statement of cash flows?
gain on the sale of land
the treasury stock is resold, total stockholders' equity:
increase
retained earnings
increase stockholders' equity
Which of the following stages of equity financing would come last for most public companies?
initial public offering
cash flows from financing activities do not include
interest received
the purchase of land is classified in the statement of cash flows as a(n)
investing activity
which of the following is an example of a cash inflow from a financing activity?
issuance of bonds
The advantages of a corporation compared to a sole proprietorship or partnership include:
limited liability
the advantages of owning a corporation include
limited liability
what is the primary reason for declaring a stock split?
lower the trading price of a stock into a more acceptable trading range
we calculate cash return on assets as:
net cash flows from operating activities divided by average total assets
the balance of cash reported in the balance sheet this year minus the balance of cash reported in the balance sheet last year equals:
net cash flows from operating, investing and financing
some cash flow ratios are derived by subtracting net cash flows from operating activities in place of:
net income
Return on assets is equal to:
net income divided by average total assets
earnings per share measures:
net income earned per share of common stock
under what section of the statement of cash flows would you classify the purchase of equipment by issuing a long-term note payable?
noncash activity
In most cases, current liabilities are payable within ____ year(s), and long-term liabilities are payable more than ____ year(s) from now.
one; one
the collection of cash from customers would be classified as which type of cash flow on scf
operating
which of the following is not true regarding cash flows?
operating activities include the payment of dividends.
the cash collection from the sale of good or services is classified in the statement of cash flows as an a(n)
operating activity
the payment of salaries is classified in the statement of cash flows as a(n);
operating activity
the statement of cash flows reports cash flows from the activities of:
operating, investing, and financing
dividends received from an investment is classified as a(n)___ cash flow, and paying dividends on stock issued is classified as a(n) ____ cash flow on the Statement of Cash flows
operating; financing
cash dividends are based on the number of shares:
outstanding
which of the following is correct about the statement of cash flows?
paying dividends to investors creates a cash outflow from financing activities
which of the following is an example of a cash outflow from an investing activities
payment of cash for the purchase of land
which of the following statements is not true relating to cash flow analysis?
positive cash flows from operations is not important to a company's survival in the long run.
cash flows from investing activities do no include
proceeds from the issuance of common stock
Return on assets is equal to:
profit margin times asset turnover
which of the following is an example of a noncash activity ?
purchase of land by issuing debt
____ is an investing cash flow and ____ is a financing cash flow, as reported in the statement of cash flows
purchasing land; repaying a bank loan
which of the following transactions would generally result in an investing cash inflow?
receive cash from the sale of land
A contingent liability that is probable and can be reasonably estimated must be
recorded
Both cash dividends and stock dividends:
reduce retained earnings
which of the following is subtracted from net income as an adjustment under the indirect method of preparing the statement of cash flows?
salaries payable decreases
which of the following is added to net income as an adjustment under the indirect method of preparing the statement of cash flows?
salaries payable increase
Gross profit is defined as:
sales minus cost of goods sold
which of the following would be classified as an investing cash flow
sell a piece of equipment below cost
the statement of cash flows:
shows that the change in total cash from one year to the next year is equal to the net operating, investing, and financing
Which financial statement separates business activities into operating, investing and financing
statement of cash flows
which of the following shows activity over a period of time?
statement of stockholders' equity
what is the effect of stock dividend on total stockholders equity?
stockholders equity does not change
which of the following is not a correct practice when adjusting net income to net operating cash flows?
subtract depreciation expense
which of the following transactions would not create a cash flow?
the company purchase land issuing common stock
in the operating activities section of the statement of cash flows, we start with net income when using:
the indirect method
If a company issues par-value stock, the amount credited to common stock will be:
the par value per share times the number of shares issued
How does the stockholders' equity section in the balance sheet differ from the statement of stockholders' equity?
the stockholders' equity section shows balances at a point in time, whereas the statement of stockholders' equity shows activity over a period of time.
Common shareholders usually have all of the following rights except:
to participate in the day-to-day operations
which of the following is not deducted from an employee's salary
unemployment taxes
We record interest expense on a note payable in the period in which:
we incur interest
