Test 2 - 102 - take home - with answers

Test 2 - 102 - take home - with answers - BSAD 102 Test...

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BSAD 102 Test 2Chapters 13-15 NAME:_______________________________________________ 1. Which of the following is TRUE of the statement of cash flows? A) The statement of cash flows reports why cash increased or decreased during the period. B) The statement of cash flows covers a span of time and is dated "Year Ended Month Day, Year". C) The statement of cash flows shows where cash came from and how cash was spent. D) All of the above are true of the statement of cash flows. Answer: D 2. A statement of cash flows is generated to show: A) the revenues the company has earned. B) the expenses the company incurred during the time period. C) the inflow and outflow of cash during the time period. D) how profits were generated. Answer: C 3. Which of the following is true about a statement of cash flows? A) The statement of cash flows is prepared at the option of management. B) The statement of cash flows is required by generally accepted accounting principles. C) The statement of cash flows may be combined with the income statement. D) The statement of cash flows does not have to be completed if an income statement is prepared. Answer: B 4. Which of the following is a purpose for the statement of cash flows? A) To evaluate board of directors' decisions B) To help predict management's future decisions C) To determine the ability to pay dividends to stockholders and interest and principle to creditors D) To report the earnings per share Answer: C 5. Which of the following is included in the statement of cash flows? A) Total changes in retained earnings B) Total changes in total liabilities C) Total changes in cash from investing activities D) Total changes in stockholder's equity Answer: C
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6. A company uses the indirect method to prepare the statement of cash flows. It presents the following amounts on its December 31, 2007 financial statements. December 31, 2007 December 31, 2006 Accounts receivable $110,000 $100,000 Cost of goods sold 560,000 Sales revenue 830,000 Accounts payable* 75,000 67,000 Inventory 86,000 105,000 Salary payable 13,000 10,000 Salary expense 49,000 45,000 *Relates solely to the acquisition of inventory What will appear in the operating activities section related to accounts receivable? A) The increase of $10,000 will be subtracted from sales revenue. B) The increase of $10,000 will be added to net income. C) The increase of $10,000 will be added to sales revenue. D) The increase of $10,000 will be subtracted from net income Answer: D 7. Which of the following is the correct order of the sections on a statement of cash flows? A) The correct order is operating, financing, investing. B) The correct order is financing, investing, operating. C) The correct order is investing, operating, financing. D) The correct order is operating, investing, financing.
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Test 2 - 102 - take home - with answers - BSAD 102 Test...

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