Answer the following questions:
1. The purchase of land for cash would be reported on the statement of cash flows as a
A. source of cash from operating activities.
B. use of cash for investing activities.
C. source of cash from financing activities.
D. use of cash for financing activities.
2. Which one of the following items is classified as an investing activity?
A. Cash receipts from interest revenue
B. Cash payments to purchase property
C. Additional investment in the company by the owner
D. Receipts of cash from customers for payment on their accounts
3. The difference between “Net Operating Income” and “Gross Profit on Sales” is that net operating income
A. includes amounts from the “Other Income” section of the income statement.
B. is the same thing as gross profit on sales, and therefore there’s no difference.
C. includes deductions for operating expenses.
D. includes deductions for “Other Expenses.”
4. Financial statements report financial data for either a period of time or for a particular date. Which of the following financial statements reports financial information for a particular date.
A. The balance sheet
B. The cash flow statement
C. The income statement
D. Both the balance sheet and the income statement
5. The cash flow statement replaced which accounting statement?
A. The profit and loss statement
B. The statement of changes in financial position
C. The statement of owner’s equity
D. The income statement
6. A company having total liabilities of $60,000 purchased a vehicle for $5,000 in cash. Its liabilities were then
A. $65,000. .
7. Which one of the following accounts would not appear on a balance sheet?
A. Mortgage payable
B. Interest expense
C. Jack Kapp, Capital
D. Notes receivable
8. The books of the Marvel Company showed the following:
Current assets $23,716
Property, plant, and equipment 45,625
Intangible assets (?)
Current liabilities 11,217
Long-term liabilities 31,415
Owner’s equity 32,709
For the company’s balance sheet to balance, intangible assets would have to be valued at
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1. The answer is option B.
2. The answer is option B....
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