Given below is a list of items that may be reported on a statement of cash flows.
Identify each as one of the following using the indirect method :
a. Operating
b. Investing
c. Financing
d. Not separately reported on a statement of cash flows
Amortization of a copyright
On January 1, 2014, the Accounts Receivable and the Allowance for Uncollectible
Accounts for Darius Company carried balances of $20,000 and $550 respectively.
During the year, the company reported $70,000 of credit sales. There were $400 of
receivables written off as uncollectible in 2014. Cash collections of receivables
amounted to $74,700. The company estimates that it will be unable to collect 5% of the
year-end accounts receivable balance. The net realizable value of receivables appearing
on the 2014 balance sheet will amount to:
a. $14,105
b. $14,155
c. $14,900
d. $15,450
Treasury stock is stock that has been issued, but not currently outstanding.
a. True
b. False
What is the form sent by the seller to the buyer as evidence of a sale?
a. an invoice approval form
b. a purchase order
c. a receiving report
d. an invoice
Match the following business forms with their characteristics below.
a. Sole proprietorship
b. Partnership
c. Corporation
Control most private resources in the U.S.
One primary purpose of a classified balance sheet is to help users evaluate the liquidity
of a company.
a. True
b. False
An entry that includes the Cash account is probably an adjustment.
a. True
b. False
Each account has a normal balance. For the following list of accounts, indicate whether
the normal balance of each is a debit or a credit.
a. Debit
b. Credit
Wages and Salaries Expense
Use the following codes to indicate how the cash flow effect, if any, of each transaction
would be reported on a statement of cash flows if the operating activities section is
prepared using the direct method.
a. Inflow from operating activity
b. Outflow from operating activity
c. Inflow from investing activity
d. Outflow from investing activity
e. Inflow from financing activity
f. Outflow from financing activity
g. Noncash investing and financing activity
h. Not reported on statement of cash flows
Issued preferred stock.
Several items from the financial statements of Standard Tires are listed below. Use the f
ollowing answer choices to identify the type of accountf
or each item listed. Place your answers in the space provided.
a. Assets
b. Liabilities
c. Revenues
d. Expenses
e. Owners’ equity Interest income
Select the action that matches the category of internal control procedures. (Select all
that apply.) Independent review and appraisal
a. One department should check on another
b. Internal audit staff ensure all is working as intended
c. Accounting and cash collection is properly separated
d. Blank checks are locked at all times when not in use
e. Origination of initial entry into accounting system
f. Specific authority is given by management for the performance of activities
A gain or loss that qualifies for extraordinary treatment on the income statement must
have which of the following qualities?
I. Unusual in Nature
II. Discontinued Segment
III. Infrequent in Occurrence
IV. Nonoperating in Nature
V. Never Occurred
a. I and V
b. III and IV
c. I and III
d. I, II, and III
The direct method of reporting cash flows from operating activities involves reconciling
net income and cash flow from operations.
a. True
b. False