1) Free cash flow is the measure of operating cash flow available for corporate purposes
after providing sufficient fixed asset additions to maintain current productive capacity
and dividends.
2) An example of deferred revenue is Unearned Rent.
3) If net income for a proprietorship was $50,000, the owner withdrew $20,000 in cash
and the owner invested $10,000 in cash, the capital of the owner increased by $40,000.
4) Under the cost price approach, the transfer price is the price at which the product or
service transferred could be sold to outside buyers.
5) The chart of accounts for a merchandise business would include an account called
Delivery Expense.
6) Accounts receivable contributed to the partnership are recorded at their face value.
7) The primary accounting tool for controlling and reporting for cost centers is a
budget.
8) Methods that ignore present value in capital investment analysis include the internal
rate of return method.
9) If the cost of materials is not a significant portion of the total product cost, the
materials may be classified as part of factory overhead cost.
10) The main source of paid-in-capital is from issuing stock.
11) Taxes deducted from an employee’s earnings to finance social security and
Medicare benefits are called FICA taxes.
12) Current position analysis indicates a company’s ability to liquidate current
liabilities.
13) A staff department or unit is one directly involved in the basic objective of the
organization.