Question 1

A gain on the sale of a fixed asset is reported on the statement of cash flows ________.

Accepted Answer

A)  as a deduction to net income under operating activities for the indirect method 
B)  as a deduction to the cash proceeds received from the sale of fixed assets under investing activities 
C)  as a noncash transaction 
D)  as a cash inflow under financing activities 
A)  as a deduction to net income under operating activities for the indirect method 
B)  as a deduction to the cash proceeds received from the sale of fixed assets under investing activities 
C)  as a noncash transaction 
D)  as a cash inflow under financing activities A

Question 2

Preferred stock has priority over common stock in ________.

Accepted Answer

A)  voting rights 
B)  distribution of assets in liquidation 
C)  payment of dividends 
D)  B and C 
A)  voting rights 
B)  distribution of assets in liquidation 
C)  payment of dividends 
D)  B and C D

Question 3

Accounts receivable is a current asset.

Accepted Answer

A) True 
 B)False  True

Question 4

Gross profit equals sales minus cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 5

Treasury stock is a deduction from total stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 6

A nonoperating item on a multiple-step income statement that reflects financial decisions is ________.

Accepted Answer

A)  gain from sale of inventory 
B)  interest expense 
C)  income tax expense 
D)  operating profit 
A)  gain from sale of inventory 
B)  interest expense 
C)  income tax expense 
D)  operating profit

Question 7

The cash paid for dividends is included in the ________ section of the statement of cash flows.

Accepted Answer

A)  operating 
B)  investing 
C)  financing 
D)  noncash 
A)  operating 
B)  investing 
C)  financing 
D)  noncash

Question 8

Benson Company's income statement showed rent expense of $16,000.The beginning balance in Prepaid Rent was $5,000.The ending balance in Prepaid Rent was $3,000.The cash paid for rent was ________.

Accepted Answer

A)  $14,000 
B)  $16,000 
C)  $19,000 
D)  $24,000 
A)  $14,000 
B)  $16,000 
C)  $19,000 
D)  $24,000

Question 9

LIFO uses the ________ costs to measure the ending inventory.

Accepted Answer

A)  latest 
B)  earliest 
C)  average 
D)  weighted-average 
A)  latest 
B)  earliest 
C)  average 
D)  weighted-average

Question 10

Which of the following is NOT a tangible asset?

Accepted Answer

A)  inventories 
B)  land 
C)  equipment 
D)  goodwill 
A)  inventories 
B)  land 
C)  equipment 
D)  goodwill

Question 11

The direct method of preparing the operating activities section of the statement of cash flows begins with net income.

Accepted Answer

A) True 
 B)False

Question 12

When using the direct method of preparing the statement of cash flows,depreciation expense is added to net income.

Accepted Answer

A) True 
 B)False

Question 13

The balances on December 31,2015 are available for Jennifer Company:
 $\begin{array}{ll}
\text { Accounts payable } & \$ 2,550 \
\text { Accounts receivable } & 3,550 \
\text { Accumulated depreciation } & 6,250 \
\text { Retained earnings, December } 31,2014 & ?\
\text { Cash } & 2,300 \
\text { Cost of goods sold } & 52,300 \
\text { Depreciation expense } & 2,500 \
\text { Dividends declared } & 8,800 \
\text { Equipment } & 29,000 \
\text { Income taxexpense } & 10,700\
\text { Interest expense } & 1,150 \
\text { Inventory } & 6,250 \
\text { Long-term notes payable } & 11,500 \
\text { Paid-in capital } & 4,450 \
\text { Prepaid rent } & 350\
\text { Rent expense } & 4,000 \
\text { Sales } & 118,600 \
\text { Wage expense } & 31,900 \
\text { Wages payable } & 3,000
\end{array}$ 
Required:
Prepare a classified balance sheet at December 31,2015.

Accepted Answer

@#IMG-DLM& Current Assets:
 @#IMG-DLM& Noncurrent

Question 14

Baldwin Company's income statement reported income tax expense of $18,000.Income tax payable at the beginning of the year was $5,000.Income tax payable at the end of the year was $4,000.The cash paid for taxes was ________.

Accepted Answer

A)  $15,000 
B)  $17,000 
C)  $19,000 
D)  $22,000 
A)  $15,000 
B)  $17,000 
C)  $19,000 
D)  $22,000

Question 15

Cash collections from customers are included in the ________ section of the statement of cash flows.Assume the direct method is used.

Accepted Answer

A)  operating 
B)  investing 
C)  financing 
D)  noncash 
A)  operating 
B)  investing 
C)  financing 
D)  noncash

Question 16

The cash paid to purchase equipment is included in the ________ section of the statement of cash flows.

Accepted Answer

A)  operating 
B)  investing 
C)  financing 
D)  noncash 
A)  operating 
B)  investing 
C)  financing 
D)  noncash

Question 17

Dividends paid are reported on the Retained Earnings Statement.

Accepted Answer

A) True 
 B)False

Question 18

In a period of inflation,LIFO results in a higher net income than FIFO.

Accepted Answer

A) True 
 B)False

Question 19

An example of an operating activity on the statement of cash flows is federal taxes paid.Assume the direct method is used.

Accepted Answer

A) True 
 B)False

Question 20

Operating income summarizes the results of basic operating activities of a company.

Accepted Answer

A) True 
 B)False

A gain on the sale of a fixed asset is reported on the statement of cash flows ________.

Preferred stock has priority over common stock in ________.

Accounts receivable is a current asset.

Gross profit equals sales minus cost of goods sold.

Treasury stock is a deduction from total stockholders' equity.

A nonoperating item on a multiple-step income statement that reflects financial decisions is ________.

The cash paid for dividends is included in the ________ section of the statement of cash flows.

Benson Company's income statement showed rent expense of $16,000.The beginning balance in Prepaid Rent was $5,000.The ending balance in Prepaid Rent was $3,000.The cash paid for rent was ________.

LIFO uses the ________ costs to measure the ending inventory.

Which of the following is NOT a tangible asset?

The direct method of preparing the operating activities section of the statement of cash flows begins with net income.

When using the direct method of preparing the statement of cash flows,depreciation expense is added to net income.

Baldwin Company's income statement reported income tax expense of $18,000.Income tax payable at the beginning of the year was $5,000.Income tax payable at the end of the year was $4,000.The cash paid for taxes was ________.

Cash collections from customers are included in the ________ section of the statement of cash flows.Assume the direct method is used.

The cash paid to purchase equipment is included in the ________ section of the statement of cash flows.

Dividends paid are reported on the Retained Earnings Statement.

In a period of inflation,LIFO results in a higher net income than FIFO.

An example of an operating activity on the statement of cash flows is federal taxes paid.Assume the direct method is used.

Operating income summarizes the results of basic operating activities of a company.

Managerial Accounting,the Business Organization,and Professional Ethics

Introduction to Cost Behavior and Cost Volume Profit Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus on Pricing Decisions

Relevant Information for Decision Making With a Focus on Operational Decisions

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding and Analyzing Consolidated Financial Statements

Filters

Exam 16: Understanding Corporate Annual Reports: Basic Financial Statements

A gain on the sale of a fixed asset is reported on the statement of cash flows ________.

Preferred stock has priority over common stock in ________.

Accounts receivable is a current asset.

Gross profit equals sales minus cost of goods sold.

Treasury stock is a deduction from total stockholders' equity.

A nonoperating item on a multiple-step income statement that reflects financial decisions is ________.

The cash paid for dividends is included in the ________ section of the statement of cash flows.

Benson Company's income statement showed rent expense of $16,000.The beginning balance in Prepaid Rent was $5,000.The ending balance in Prepaid Rent was $3,000.The cash paid for rent was ________.

LIFO uses the ________ costs to measure the ending inventory.

Which of the following is NOT a tangible asset?

The direct method of preparing the operating activities section of the statement of cash flows begins with net income.

When using the direct method of preparing the statement of cash flows,depreciation expense is added to net income.

Baldwin Company's income statement reported income tax expense of $18,000.Income tax payable at the beginning of the year was $5,000.Income tax payable at the end of the year was $4,000.The cash paid for taxes was ________.

Cash collections from customers are included in the ________ section of the statement of cash flows.Assume the direct method is used.

The cash paid to purchase equipment is included in the ________ section of the statement of cash flows.

Dividends paid are reported on the Retained Earnings Statement.

In a period of inflation,LIFO results in a higher net income than FIFO.

An example of an operating activity on the statement of cash flows is federal taxes paid.Assume the direct method is used.

Operating income summarizes the results of basic operating activities of a company.

Managerial Accounting,the Business Organization,and Professional Ethics

Introduction to Cost Behavior and Cost Volume Profit Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus on Pricing Decisions

Relevant Information for Decision Making With a Focus on Operational Decisions

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding and Analyzing Consolidated Financial Statements

Filters