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Final Review Questions

Final Review Questions - 2251 W07 Final Exam Review 1 The...

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2251 W07 Final Exam Review 1. The effect of a stock split is to A)reduce the amount of retained earnings and increase total contributed capital. B)reduce the amount of retained earnings and reduce the amount of total assets. C)reduce the amount of retained earnings and reduce total contributed capital. D)reduce the amount of retained earnings and increase the balance in a liability account. E)None of the above is correct. Answer: E 2. A common measure of liquidity is 3. A common measure of profitability is 4. Which of the following is a cash flow from operating activities? operations.
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2251 W07 Final Exam Review 5. Creston Company gathered the following data to prepare its 2007 statement of cash flows: Net income $70,000 Depreciation expense 10,000 Accounts receivable decrease 5,000 Wages payable increase 6,000 Amortization of patent 2,000 Income tax payable decrease 4,000 Based only on the above data, the net cash inflow from operating activities during 2007 was A)$83,000. B)$89,000. C)$91,000. D)$97,000. E)None of the above is correct. Answer: B 6. Newton Company reported total sales revenue of $55,000 and total expenses amounting to $45,000 (i.e., net income $10,000) on its income statement for the year ended December 31, 2007. During 2007, accounts receivable decreased by $4,000, merchandise inventory decreased by $6,000, accounts payable increased by $2,000 and depreciation of $8,000 was recorded. Therefore, based only on this information, the net cash flow from operating activities for 2007 was:
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2251 W07 Final Exam Review
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