Chapter 7 test practice test without answers.

Chapter 7 test practice test without answers. - 1. Which of...

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1. Which of the following would require an adjustment in the computation of cash flow from operations using the indirect method? I. Depreciation expense II. Loss on sale of asset III. Sale of services to customers for cash IV. Utility bill received and paid in cash A. I B. I and II C. I and III D. IV 2. On a statement of cash flows that uses the indirect approach, calculation of cash flow from operations treats depreciation as an adjustment to reported net income because: A. depreciation is a direct source of cash B. depreciation is an outflow of cash to a reserve account for the replacement of assets C. depreciation reduces net income and involves an outflow of cash D. depreciation reduces net income but does not involve an outflow of cash 3. Which of the following items is deducted from net income to arrive at cash flow from operations when using the indirect method? A. depreciation expense B. amortization expense C. decrease in accounts receivable D. decrease in accounts payable 4. Compared with firms with capital leases, firms with operating leases generally report:
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This note was uploaded on 02/16/2012 for the course FINA 470 taught by Professor Austin during the Fall '11 term at South Carolina.

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Chapter 7 test practice test without answers. - 1. Which of...

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