16 Interactive Quiz A

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Interactive Quiz A http://highered.mcgraw-hill.com/sites/0072996536/student_view0/chapter16/interactive_quiz_a.html[6/22/2010 6:59:20 PM] Interactive Quiz A (See related pages) Results Reporter Out of 29 questions, you answered 7 correctly with a final grade of 24% 7 correct (24%) 22 incorrect (76%) 0 unanswered (0%) Your Results: The correct answer for each question is indicated by a . 1 INCORRECT Which of the following transactions would not involve the immediate inflow of cash? A) The conversion of bonds payable directly into common stock. B) The issuance of common stock directly onto the New York Stock Exchange. C) The sale of one of the firm's used machines for cash. D) The purchase of a machine for cash. E) All of the above involve the immediate inflow of cash. Feedback: When bonds payable are converted into common stock there is no cash inflow or outflow to the firm. C1 2 INCORRECT Which one of the following transactions would not involve the immediate outflow of cash? A) The issuance of a stock dividend. B) The payment of the annual cash dividend. C) Payment of the week’s earned wages to the employees. D) Paying off the company’s accounts payable. E) All of the above involve the immediate outflow of cash. Feedback: The issuance of a stock dividend does not involve the outflow of cash. C1 3 INCORRECT Which one of the following transactions would not normally be considered an operating, investing, or financing activity involving the inflow or outflow of cash? A) Acquiring cash for the business by signing a note payable with the local bank. B) Buying a new building for the business by issuing common stock whose market value is equal to the purchase price. C) Investing in treasury stock by acquiring it on the New York Stock Exchange. D) Paying back in full a bank loan taken out two years ago. E) All of the above involve the inflow or outflow of cash. Feedback: The most common practice used when statements of cash flow are prepared is to only report transactions involving the inflow and outflow of cash. Buying a new building by issuing common stock does not involve the use of cash and would not be reported on the statement of cash flows, instead, such a transaction would be reported on a supplemental schedule. C1 4 INCORRECT Which of the following assets constitute cash and cash equivalents? A) Cash in the company’s checking accounts B) Cash in the company’s savings accounts that is unrestricted as to its use. C) Trading securities D) Available-for-sale securities which management has just reclassified as trading securities. E) All of the above could be considered cash or cash equivalents. Feedback: All of the above could be considered cash or cash equivalents. C1 5 INCORRECT Since cash and cash equivalents are combined when preparing the statement of cash flows which of the following transactions would not be reported as a separate item on the statement of cash flows? A)
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This note was uploaded on 08/01/2010 for the course ACC 102 taught by Professor Amyross during the Spring '10 term at Thomas Edison State.

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16 Interactive Quiz A - Interactive Quiz A Home >...

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