Financial Accounting 11-12
An auditors' report by independent accountants
gives investors assurance that the company's financial statements conform to GAAP.
On an indirect method statement of cash flows, an increase in accounts payable is
added to net income in the operating activities section.
If the indirect method is used to calculate net cash provided by operating activities, a decrease in accounts receivable is
added to net income.
On the statement of cash flows, increase and decreased in long term assets resulting from cash transaction are reported to be?
Investing activities
On the statement of cash flows, increase and decreases in long tern assets results from cash transactions are reported as.
Investing activities
Selling equipment for cash is reported on the statement of cash flows under?
Investing activities
When using the indirect method of preparing the statement of cash flow, the starting point to determine net cash provided by operating activities is?
Net income
Which of the three activities reported on the statement of cash flows is the most important to evaluate when analyzing a company's long- term survival?
Operating activities
The statement of cash flows does not report
Revenue and expense for the current year.
Which of the following transactions does not affect cash during a period?
A write-off of an uncollectible account
Pics minus Made minus Easy Camera Co. sold equipment with a cost of $ 21,000 and accumulated depreciation of $ 6,000 for an amount that resulted in a gain of $ 5,000. What amount should Pics minus Made minus Easy report on the statement of cash flows as "proceeds from sale of plant assets"?
21,000-6,000+5,000= 20,000
In 2018, Crowd Company repurchased its own stock at a cost of $ 49,000. During the year, the company purchased land with cash for $ 121,000 and issued bonds payable for $ 300,000. Net cash provided by financing activities for the year would have been
300,000- 49,000= 251,000
In 2018, fete company repurchased its stocks at a cost of $49,000. During the year, the company purchased land with cash for $122,000 and issued bonds payable for $425,000. Net cash provided by financing activities for the yeast would have been?
425,000- 49,000= 376,000
In the current year, FWCN company sold land for $77,000 cash, purchased a delivery van for $29,000 cash, and issued common stock for $102,000 cash. The net cash provided by investing activates is?
77,000- 29,000= 48,000
In the current year, BRFC Company sold land for $84,000 cash, purchased a delivery van for $ 25,000 cash, and issued common stock for $ 99,000 cash. The net cash provided by investing activities is
84000-25000= 59000
A public company's annual report filed with the SEC includes
A. a description of the business. Your answer is not correct.B. B. financial statements. C. management's explanations for trends in sales. D. answer All of the above are included in an annual report.
Increasing earnings quality could be indicated by
A. an improving operating earnings/sales ratio. B. an improving gross margin/sales ratio. C. a declining operating expenses/sales ratio. D. answer all of the above.
Which of the following can be used to do an industry and company analysis?
A. Management's Discussion and Analysis section of the annual report B. Business publications Your answer is not correct.C. Description of the company's business in the annual report D. answer All of the listed options
In the indirect method is used to calculate net cash provided by operating activities, a decrease in accounts receivable is
Added to net income
On the statement of cash flows, which of the following items is classified as a financing activity?
Borrowing cash by signing a long term note
On the statement of cash flow, which of the following items is classified as an investing activity?
Collecting cash on a long -term loan
On the statement of cash flows, which of the following items is classified as an investing activity
Collecting cash on a long-term loan
If the indirect method is used, which of the following items appears on a statement of cash flows?
Depreciation expense
The issuance of stock for cash is reported on the statement of cash flows under
Financing Activities
Cash received from the issuance of common stock is reported on a statement of cash flows under?
Financing activities
Payoff bonds payable is reported on the statement of cash flow under?
Financing activities
How do Cramer's accrued liabilities affect the company's statement of cash flows for 2018?
They increase cash provided by operating activities
The statement of cash flow is designed for all of he following purposes expect?
To list all revenues and expenses
Verba Corporation has an inventory turnover of 15 times per year, while the industry average is 4.0 times per year. What does this indicate about Verba's inventory turnover?
Verba may not be keeping enough inventory on hand, which could lead to lost sales.
The measure of a company's ability to collect cash from its customers who purchase on account is the
accounts receivable turnover.
Steadily increasing cost of goods sold as a percentage of net revenues is an indication of
decreasing earnings quality.
On an indirect method statement of cash flows, an increase in a prepaid insurance is
deducted from net income
On an indirect method statement of cash flows, a gain on the sale of plant assets is
deducted from net income in the operating activities section.
A ratio that measures a company's profitability is the
gross margin percentage.
A company with high earnings quality is more likely to experience ________ than a company with low earnings quality.
high earnings in the future
The quality of earnings concept indicates that
income from continuing operations is a more relevant predictor of future performance than income from one-time transactions.
When performing a horizontal analysis on an income statement, the percentage change in any individual item is calculated by dividing the dollar amount of the change from the base period to the current period by
the base period amount.
Ratios that measure liquidity include all of the following except:
the leverage ratio.
The primary focus of horizontal analysis is
the percentage changes in line items on the comparative financial statements.
The base for inventory in a vertical analysis is:
total assets.
If you want an indication of the direction a business is taking, you would use
trend percentages.
Expressing accounts receivable as a percentage of total assets is an example of
vertical analysis.