56) Which of the following is not a major section in the statement of cash flows? A) Cash flows from customers. B) Cash flows from operating activities. C) Cash flows from investing activities. D) Cash flows from financing activities.
57) In the Allowance Method when we write off a receivable A) It depends B) Assets increase, Net Income increases. C) Assets decrease, Net Income decreases D) Assets stay the same, Net Income stays the same.
58) ABC had the following final balances after the first year of operations: assets, $55,000; stockholders’ equity, $25,000; dividends, $3,000; and net income, $10,000. What is the amount of ABC’s liabilities? A) $30,000. B) $13,000. C) $7,000. D) $55,000.
59) ABC has the following information: Net credit sales = $400,000 Net income = $100,000 Average total assets = $80,000 Average accounts receivable = $20,000 What is ABC’s average collection period (rounded to the nearest whole day)? A) 9 days. B) 5 days. C) 18 days. D) 73 days.
60) Given the information below about ABC, what was the amount of dividends the company paid in the current period? Beginning retained earnings $54,000 Ending retained earnings $110,000 Decrease in cash $10,000 Net income $84,000 Change in stockholders’ equity $15,000 A) $13,000. B) $18,000. C) $110,000. D) $28,000.
61) Which of the following is possible for a particular business transaction? A) Increase assets; Decrease liabilities B) Decrease assets; Increase assets C) Decrease assets; Increase stockholders’ equity D) Decrease liabilities; Increase expenses
62) On March 3, ABC purchased a desk for $450 on account. On March 22, ABC purchased another desk for $500 also on account, and then on March 24, ABC paid $400 on account. At the end of March, what amount should ABC report for desks (assuming these two desks were the only desks they had)? A) $950. B) $50. C) $450. D) $500. 9
63) For a journal entry with only two lines, the following entry is valid: Increase in a liability, Decrease in Revenue. A) True B) False
64) For a journal entry with only two lines, the following entry is valid: Decrease in one Owners’ Equity, Decrease in a second Owners’ Equity. A) False B) True
65) Which of the following statements is NOT correct about the financial statements? A) A balance sheet reports assets, liabilities, revenues, and expenses. B) The statement of stockholders’ equity presents common stock, dividends, and retained earnings information. C) An income statement reports revenues, expenses, and net income information. D) The statement of cash flows shows cash inflows and outflows from operating, financing, and investing activities.
66) Consider the following account balances of ABC at the end of the year: Accounts Payable $4,400 Salaries Expense 12,800 Cash 1,700 Common Stock 2,400 Service Revenue 8,300 Supplies 4,300 Retained Earnings 1,100 Utilities Expense 5,000 How many of these accounts would appear in ABC’s year-end balance sheet? A) Three. B) Two. C) Five. D) Four.
67) For a journal entry with only two lines, the following entry is valid: Decrease in Owners’ Equity, Decrease in Revenue. A) True B) False
68) For a journal entry with only two lines, the following entry is valid: Increase in Revenue, Increase in Expense. A) True B) False
69) A company receives a $50,000 cash deposit from a customer on October 15 but will not provide services until November 20. Which of the following statements is true? A) The company records service revenue on October 15. B) The company records cash collection on November 20. C) The company records nothing on October 15. D) The company records deferred revenue on October 15.
70) For a journal entry with only two lines, the following entry is valid: Increase in one Owners’ Equity, Decrease in a second Owners’ Equity. A) False B) True