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
