Final

Question 1

Which cash flow is directly related to earning income?

Answer 1

Operating

Question 2

Which cash flow is from the (1) purchase or sale of plants, equipment, and (2) investments?

Answer 2

Investing

Question 3

Which cash flow is from to investors and creditors?

Answer 3

Financing

Question 4

What are the steps to find statement of cash flows?

Answer 4

Find the change, classify the B/S, Operating CF, Investing CF, Financing CF, and Final Check

Question 5

What B/S items belong on the operating section?

Answer 5

Current assets and current liabilites

Question 6

What B/S items belong on the investing section?

Answer 6

Long term assets

Question 7

What B/S items belong on the financing section?

Answer 7

Long term liabilities and stockholders’ equity

Question 8

How do you start the Indirect Method?

Answer 8

(1) Start with income. (2) Add depreciation and amortization expense. (3) Subtract gain on sale or add loss on sale. (4) Subtract/Add operating assets/liabilities.

Question 9

Change in Accounts Receivable is…

Answer 9

Operating asset

Question 10

Change in Inventories is…

Answer 10

Operating asset

Question 11

Change in Prepaid Expenses is…

Answer 11

Operating asset

Question 12

Change in Accounts Payable is…

Answer 12

Operating liability

Question 13

Change in Accrued Expenses is…

Answer 13

Operating liability

Question 14

Increase in CA…

Answer 14

Subtract

Question 15

Decrease in CA…

Answer 15

Add

Question 16

Increase in CL…

Answer 16

Add

Question 17

Decrease in CL…

Answer 17

Subtract

Question 18

Which method of accounting records income when you receive it and records an expense when you pay it?

Answer 18

Cash Accounting

Question 19

Which method of accounting records income when you earn it and records an expense when you incur it?

Answer 19

Accrual Accounting

Question 20

When should revenue be recognized?

Answer 20

When it’s realized and earned

Question 21

What accounts are found on an income statement?

Answer 21

Revenue, expenses, gains, losses, net income

Question 22

What accounts are found on a Balance Sheet?

Answer 22

Assets, liabilities, and equity

Question 23

Total amount of money that a company has billed to its customers.

Answer 23

Gross accounts receivable

Question 24

Amount of money that a company expects to receive after deducting and AFDA.

Answer 24

Net account receivable

Question 25

The amount that a company’s assets are depreciated for a single period.

Answer 25

Depreciation expense

Question 26

The total amount that a company has depreciated its asset to date.

Answer 26

Accumulated depreciation

Question 27

An accounting charge that companies record when goodwill’s carrying value exceeds its fair value.

Answer 27

Goodwill

Question 28

What are the components of the Stockholders Equity?

Answer 28

Outstanding shares, APIC, retained earnings, and treasury stock

Question 29

The difference between the par value of a stock and the price that investors actually pay for it.

Answer 29

APIC

Question 30

(cost - residual value) * 1 / useful life

Answer 30

straight-line method

Question 31

2 * (cost - accumulated depreciation) / useful life

Answer 31

double-declining method

Question 32

ending inventory

Answer 32

beginning inventory + purchases - COGS

Question 33

gross profit

Answer 33

total revenue - COGS