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A/ An _______ is added back to net income in the operating section of an indirect cash flow statement




1. A/ An _______ is added back to net income in the operating section of an indirect cash flow statement.;A. increase in inventory;B. depreciation;C. decrease in accounts payable;D. increase in accounts receivable;2. The following information is available for Allsport Company;Cost of goods sold $545,000;Merchandise inventory, 12/31/13 $105,000;Merchandise inventory, 12/31/14 $112,000;Accounts payable, 12/31/13 $98,500;Accounts payable, 12/31/14 $101,300;What amount was paid for merchandise during 2014?;A. $554,800;B. $540,800;C. $549,200;D. $545,000;3. Knutson Company reacquired 5,000 shares of its $15-par common stock for $13/share. The debit to Treasury Stock is;A. $65,000.;B. $8,000.;C. $10,000.;D. $75,000.;4. A company sold an asset with a book value of $56,000 for $35,000 cash. Which of the following is a true statement?;A. Loss on sale equals $35,000 and Cash inflow equals $21,000.;B. Loss on sale equals $56,000 and Cash inflow equals $56,000.;C. Loss on sale equals $35,000 and Cash inflow equals $35,000.;D. Loss on sale equals $21,000 and Cash inflow equals $35,000.;5. On the income statement, extraordinary items are reported;A. immediately after the continuing operations section.;B. before the operating income section.;C. net of income tax or net of income tax savings.;D. immediately before the discontinued operations section.;6. For the years 2012, 2013, and 2014, the sales of Red Line, Inc. are $40,000, $60,000 and $80,000, respectively. If 2012 is the base year, the trend percentage for 2013 was;A. 150%.;B. 0%.;C. 133%.;D. 200%.;7. The formula for computing additional paid-in capital in excess of par is shares of stock times;A. selling price per share minus par value per share.;B. par value per share of stock.;C. selling price per share of stock.;D. selling price per share plus par value per share.;8. The following information applied to Advanced Industries, Inc. for 2014;Earnings/share $17.68;Market price per share of common stock $52;Number of shares of common stock outstanding 52,000;Net income $48,000;Dividends/share $7.14;What is the dividend yield for Advanced Industries, Inc. (to the nearest tenth of a percent)?;A. 92.3%;B. 13.7%;C. 40.4%;D. 34.0%;9. A journal entry for the sale of $10 par-common stock for $18 per share would include a;A. credit to Cash.;B. credit to Paid-In Capital in Excess of Par?Common Stock.;C. debit to Common Stock.;D. debit to Paid-In Capital in Excess of Par?Common Stock.;10. On the _______ of a cash dividend, no journal entry is required.;A. declaration date;B. payment date;C. preferred date;D. date of record;11. Which of the following is not a part of financing activities?;A. Issuing stock;B. Buying land;C. Paying off loans;D. Paying dividends;12. When a company sells off part of its business, this transaction is reported in a/ the;A. retrospective application.;B. continuing operations section.;C. discontinued operations section.;D. extraordinary items section.;13. The 2013 and 2014 balance sheets for Newport Industrial showed Cash of $8,000 and $9,500, respectively, Accounts Receivable of $14, 000 and $16,000, respectively, Inventory of $11,000 and $8,000, respectively, and Accounts Payable of $5,000 and $7,000, respectively. Its 2014 income statement showed Net Sales of $108,000, Cost of Goods Sold of $62,000, and Net Income of $27,000. The cash conversion cycle for 2014 (round calculations to two decimal places) is _______ days.;A. 71.30;B. 141.94;C. 30.08;D. 40.56;14. A purchase of new equipment on a note payable under the direct method is reported;A. as a separate disclosure as a non-cash transaction.;B. in the operating section of the cash flow statement.;C. in the financing section of the cash flow statement.;D. in the investing section of the cash flow statement.;15. Choose the correct formula to determine a trend percentage.;A. An item from any year divided by the same item from a base year, multiplied by 100.;B. Net profit of the current year divided by net profit of a base year.;C. An item from the base year multiplied by the same item from the current year.;D. The total income of the current year, minus the total income from a base year.;16. Which is a value placed on a certificate for a share of the company's stock?;A. Stated value;B. Market value;C. Additional paid-in capital;D. Paid-in capital;17. Of the following, which is not classified as an investing activity on the statement of cash flows?;A. Collecting the principal on loans;B. Sale of equipment for cash;C. Purchasing land;D. Selling goods and services;18. R&R Heating, Inc. has 350,000 shares of $3-par common stock outstanding. They have declared a 5% stock dividend. The current market price of the common stock is $7.50 per share. The amount that will be credited to common stock on the date of declaration is;A. $183,750.;B. $78,750.;C. $131,250.;D. $52,500.;19. Other than depreciation, a company's operating expenses for the year were $335,000. Prepaid expenses decreased by $7,000. Cash payments for operating expenses to be reported on the cash flow statement using the direct method are;A. $328,000.;B. $7,000.;C. $335,000.;D. $342,000.;20. Haskins, Inc. sells 1,000 shares of $12 par common stock for $20 per share. The journal entry is;A. debit Cash $20,000, credit Common Stock $12,000, credit Paid-In Capital in Excess of Par-Common Stock $8,000.;B. debit Cash $12,000, credit Common Stock $12,000.;C. debit Cash $12,000, debit Paid-In Capital in Excess of Par?Common $8,000, credit Common Stock $20,000.;D. debit Cash $20,000, credit Common Stock $20,000.;21. Which of the following causes the par value of a company's stock to decrease?;A. Stock dividend;B. Stock split;C. Cash dividend;D. Sale of additional stock;22. Which is not included in paid-in capital?;A. Cash;B. Common Stock;C. Preferred Stock;D. Additional Paid-in Capital;23. Cherry Corporation's outstanding stock is 100 shares of $100 par, 11% cumulative preferred stock, and 2,000 shares of $12 par common stock. Cherry paid $1,600 in cash dividends during the year. No dividends are in arrears. Common stockholders received;A. $1,100.;B. $500.;C. $0.;D. $2,500.;24. Fine Furniture Company had a net income of $50,000. Accounts receivable increased by $30,000, inventory decreased by $20,000, amounts payable increased by $4,000, and salaries payable decreased by $1,000. The amount of cash flow from continuing operating activities under the indirect method is;A. $55,000.;B. $65,000.;C. $43,000.;D. $37,000.;25. Tucker, Inc.'s net sales decreased from $90,000 in year one to $45,000 in year two, and its cost of goods sold decreased from $30,000 in year one to $20,000 in year two. The vertical analysis based on sales for cost of goods sold for the two periods (rounded to nearest tenth of a percent) is;A. 44.4% and 33.3%.;B. 33.3% and 44.4%.;C. 225% and 300%.;D. 300% and 225%.;26. Tucker Enterprises' Accounts Receivable increased by $48,000, and its Accounts Payable increased by $27,000. What is the net effect on cash from operations under the indirect method?;A. ?$75,000;B. ?$21,000;C. +$75,000;D. +$21,000;27. Hallett Industries, Inc. reported net sales of $306,000, cost of goods sold of $192,600, operating expenses of $58,900, and income tax expense of 12,300. What is Hallett Industries' net income percentage?;A. 62.94;B. 37.06;C. 17.81;D. 13.79;28. Allied Industrial has net sales of $1,200,000, net income of $85,000, average current assets of $53,000, average fixed assets of $184,000, and average total assets of $237,000. What is Allied Industrial's total asset turnover ratio?;A. 5.06;B. 22.64;C. 6.52;D. 0.20;29. Hanna Industries has an inventory turnover of 112 days, an accounts payable turnover of 73 days, and an accounts receivable turnover of 82 days. Hanna's cash conversion cycle is;A. 103 days.;B. 43 days.;C. 121 days.;D. 9 days.;30. A business wanting to incorporate must file articles of incorporation with;A. any state in which they will do business.;B. the state office dealing with incorporation.;C. the federal government.;D. the local government.;31. Operating activities are transactions and events associated with selling a product or providing a service related to the;A. retained earnings reported on the balance sheet.;B. net income reported on the statement of retained earnings.;C. assets and liabilities reported on the balance sheet.;D. revenues and expenses reported on the income statement.;33. Motor Works, Inc. has declared a $20,000 cash dividend to shareholders. The company has 5,000 shares of $15-par, 10% preferred stock and 10,000 shares of $20-par common stock. The preferred stock is cumulative. How much will be distributed to the preferred and common stockholders on the date of payment if the preferred stock is $8,000 in arrears?;A. $20,000 preferred, $0 common;B. $8,000 preferred, $12,000 common;C. $15,500 preferred, $4,500 common;D. $7,500 preferred, $12,500 common;34. Eagle Ridge, Inc. issued 40 shares of $20 par value stock to its accountant in full payment for her $900 fee for assisting in setting up the new company. The entry for the issuance of the stock is a;A. debit to Paid-in Capital in Excess of Par?Common for $100.;B. credit to Common Stock for $800.;C. credit to Common Stock for $900.;D. debit to Common Stock for $800.;35. An example of a cash outflow from investing activities is;A. the purchase of treasury stock.;B. issuance of a note payable.;C. paying cash dividends.;D. making a loan to another company.;36. The statement of cash flows reports the sources and uses of cash from financing, investing, and _______ activities.;A. managerial;B. credit;C. liquidation;D. operating;37. The Coulter Corporation Stockholders' Equity section includes the following information;Preferred Stock $12,000;Paid-in Capital in Excess of Par-Preferred $2,700;Common Stock $15,000;Paid-in Capital in Excess of Par-Common $4,100;Retained Earnings $8,200;What is the total selling price of the common stock?;A. $15,000;B. $27,300;C. $19,100;D. $14,700;39. The stockholders' right of _______ means that stockholders will receive a proportionate share of any assets left after a company goes out of business.;A. voting;B. dividends;C. preemption;D. liquidation;40. A company has current assets of $70,000, quick assets of $30,000, total assets of $150,000, current liabilities of $50,000, and net sales of $80,000. What is the current ratio of this company?;A. 0.20;B. 1.00;C. 3.00;D. 1.40;41. The debt ratio is the relationship between;A. total assets and current liabilities.;B. current assets and total liabilities.;C. current assets and current liabilities.;D. total assets and total liabilities.;42. A business's Accounts Payable balance has decreased during the year. How would this affect the statement of cash flows operations section under the indirect method?;A. It would be subtracted from net income.;B. It is already included in the net income.;C. It does not affect the cash flow from operations.;D. It would be added back to net income.


Paper#19013 | Written in 18-Jul-2015

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