Quiz AC-4 - 31 The book value of a fixed asset is the same...

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31. The book value of a fixed asset is the same as its fair value. (Points: 1) True False 32. Depreciation (or amortization or depletion) is recognized for every long-term asset a company owns. (Points: 1) True False 33. The only accurate method of inventory accounting is weighted average method. (Points: 1) True False 34. Conmpanies can continue to use an asset that has been fully depreciated. (Points: 1) True False 35. The revenue recognition principle requires companies to wait until cash is received to recognize revenue. (Points: 1) True False 1. Question: The Direct Method presentation of the Statement of Cash Flows Your Answer: is the only GAAP presentation allowed. is the preferred GAAP presentation. CORRECT is a non-GAAP presentation. Points Received: 1 of 1 Comments: 2. Question: For its most recent year, a corporation had beginning and ending accounts receivable balances of $50,000 and $60,000, respectively. The year's sales were $800,000. What was the amount of cash received from customers during the year? Your Answer: $790,000 ( CORRECT. Since accounts receivable increased by $10,000, cash collections from customers must have been $10,000 less than the year's sales. ) CORRECT $800,000 ( Incorrect. You may have obtained this amount by not adjusting the year's sales for the change in accounts receivable. However, the accounts receivable increase means that cash receipts from customers were less than sales. ) $810,000 ( Incorrect. You may have obtained this amount by adding the $10,000 increase in accounts receivable to the year's sales. However, the accounts receivable increase means that cash receipts from customers were less than sales. ) Instructor Explanation: Consider how the change in the accounts receivable balance affects the relationship between the year's sales and the cash receipts from customers. Points Received: 1 of 1 Comments: 3. Question:
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This note was uploaded on 06/20/2010 for the course FINA 6266 taught by Professor Burt during the Spring '10 term at University of Arkansas for Medical Sciences.

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Quiz AC-4 - 31 The book value of a fixed asset is the same...

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