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Exam 1: Business Decisions and Financial Accounting

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Question 31

Multiple Choice

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Notes payable are like accounts payable except that they:

A) Charge interest
B) Can be outstanding for long periods (more than one year)
C) Are documented using formal documents called notes
D) All of the above

E) All of the above
F) A) and B)

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Question 32

Multiple Choice

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Which of the following is not an alternative term used for the income statement?

A) Statement of Income.
B) Statement of Financial Position.
C) Statement of Earnings.
D) Profit and Loss Statement.

E) B) and C)
F) None of the above

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Question 33

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The shareholders' equity in a company is the difference between assets and liabilities.

The separate entity assumption requires that a business's financial reports include only the activities of the business and its shareholders.

The income statement primarily shows whether a business made a profit from selling goods or providing services after subtracting the costs of doing business.

$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ GIL'S FISHING EQUIPMENT, INC. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Statement of Cash Flows $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ For the Year Ended December 31, 2008 $\begin{array}{l}\begin{array}{|c|c|}\hline\text { Cash flows from operating activities }\\\hline \text { Cash collected from customers } & \text { A } \\\hline \text { Cash paid to suppliers and employees } & \text { B } \\\hline \text { Cash paid for other operating activities } & \text { C } \\\hline \text { Net cash flow from operating activities } & \\\hline \text { Cash flows from investing activities } & \\\hline \text { Cash paid to purchase equipment and other assets } & \text { D } \\\hline \begin{array}{c}\text { Cash received from selling equipment and other } \\\text { assets }\end{array} & \underline{E} \\\hline \text { Net cash flow from investing activities } & \\\hline \text { Cash flows from financing activities } & \\\hline \text { Cash paid on notes payable } & \text { F } \\\hline \text { Cash paid for dividends } & \underline{G} \\\hline \text { Net cash flow from financing activities } & \\\hline \text { Net change in cash duringthe year } & \\\hline \text { Cash at beginning of year } & \\\hline \text { Cash at end of year } &\\\hline\end{array}\end{array}$ -Refer to the above table.In the statement of cash flows which letters represent cash outflows?

Which of the following is not an expense?

Over the past year Collins Company has issued $200,000 in common shares and paid $125,000 in cash dividends.The company started the year with retained earnings of $500,000 and ended the year with $700,000,while realizing $1,550,000 in revenues.What were the expenses realized for Collins Co.for the year?

Match the lettered terms to the blanks below to complete the relevant formula for each financial statement. A.Cash at beginning of year B.Net cash flow from operating activities C.Balance of retained earnings from previous year D.Net cash flow from investing activities E.Liabilities F.Net cash flow from financing activities G.Balance of retained earnings at end of year H.Net income I.Revenue J.Assets K.Shareholders' equity L.Expenses M.Cash at end of year N.Dividends paid A letter may be used more than once.Use the blank on the left side of the equals sign for the "bottom line" number that is reported at the end of each financial statement.Rearrange the formula if necessary. $\begin{array}{|l|l|l|l|l|l|l|l|l|}\hline \text { Balance Sheet } & & = & & + & & & & \\\hline \text { Income Statement } & & = & & - & & & & \\\hline \begin{array}{l|}\text { Statement of Retained } \\\text { Earnings }\end{array} & & = & & + & & - & & \\\hline \text { Statement of CashFlows } & & = & & + & & + & &+& \\\hline\end{array}$

Shareholders are creditors of a company.

Every financial statement should have "who,what,and when" in its heading.These are:

Which of the following is incorrect about the notes to the financial statements:

Which of the following would $\bold{not}$ represent a financing activity?

Financing that individuals or institutions have provided to a company is:

Which of the following is an external user?

In Canada,Generally Accepted Accounting Principles (GAAP) are established:

At the end of last year,the company's assets totalled $860,000 and its liabilities totalled $740,000.During the current year,the company's total assets increased by $58,000 and its total liabilities increased by $24,000.At the end of the current year:

If XYZ Company had $12 million in revenue and net income of $3 million then its:

If a company uses $50,000 of its cash to buy an asset then:

The statement of cash flows is divided into three activities.They are,activities related to,