Deck7

Question 1

Advertising expense is usually attributed to selling expense and not General And Administrative expense

Answer 1

True

Question 2

Interest expense is usually reported separately of general and administrative expenses

Answer 2

True

Question 3

Unrealized holding gains from a debt security that is transferred from “held to maturity” to “available for sale” a recorded in Net Income not Other Comprehensive income live AFS securities

Answer 3

True

Question 4

Is loss of write down on Inventory included in “Other Comprehensive Income”?

Answer 4

Yes

Question 5

The “Statement of Changes in Equity” reconciles all the beginning and ending balances the Equity Accounts.

Answer 5

The Statement shows the beginning balances, the details all the changes, and then ends with the closing balance.

Question 6

Do the statement of Cash flows report just cash or cash equivalents

Answer 6

Cash and Cash equivalents

Question 7

Conversion of Debt to Equity would appear on a supplemental noncash disclosure schedule with statement of cash flows

Answer 7

true

Question 8

“Statement of Cash Flows” reports changes in Cash by category. Name these 3 categories

Answer 8

Operating, Investing, Financing

Question 9

Name the Main purpose of the Statement of Cash Flows

Answer 9

To report a company’s Incoming and Outgoing cash during a period

Question 10

How many months to maturity can a note have to be classified as a Cash equivalent under the “Statement of Cash flows”?

Answer 10

3 months

Question 11

“Retained Earnings” is nowhere on the “Statement of Cash Flows”

Answer 11

True

Question 12

The statement of cash flows is required for all businesses that report a Balance sheet and Income Statement

Answer 12

True

Question 13

Cash Flows - Interest payments made on Bonds are Operating, Interest payed on Dividends are Financing, Interest payed to acquire stock is Investing

Answer 13

True

Question 14

On the Statement of Cash Flows, if a business buys a building and pays cash for part and issues a note for the rest, what amount is reported as Financing Activity?

Answer 14

Zero

Question 15

What is the Equation for Working Capital

Answer 15

Current Assets - Current Liabilities

Question 16

(On a $9000 piece of Equipment) If a company pays $3000 down for equipment, then pays the other $6000 each month for the remainder of the year, then how is the $9000 paid for the equipment classified on the Statement of Cash Flow?

Answer 16

$3000 to Investing

$6000 to Financing

Question 17

“Statement of Cash Flows” Indirect Method -does what for Operating?

Answer 17

Reconciles Income Statement to Statement of Cash Flows

Question 18

“Statement of Cash Flows” Direct Method - tell Operating Activities how?

Answer 18

It just lists them

Question 19

Is there a Contra Account for Amortization like there is with Depreciation (Accumulated Depreciation)

Answer 19

NO

Question 20

When an intangible asset is Amortized, you should attribute the change in the Assets Value as __________________.

Answer 20

Amortization Expense - When doing a Statement of Cash Flow using the Indirect Method, make sure to add this back