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