Questions:
1. A machine with a cost of $146,000 and accumulated depreciation of $101,000 is sold for $58,000 cash. The amount that should be reported as a source of cash under cash flows from investing activities is:
• $13,000
• $45,000
• $58,000
• Zero. This is a financing activity.
• Zero. This is an operating activity.
2. Becker Corporation paid cash dividends totaling $75,000 during its most recent fiscal year. How should this information be reported on Becker's statement of cash flows?
• In investing activities as a use of funds.
• In financing activities as a use of funds.
• In operating activities as a source of funds.
• In financing activities as a source of funds.
• In investing activities as a source of funds.
3. The indirect method for the preparion of the operating activites section of the statement of cash flows:
• Is required if the company is a merchandiser
• Must not be used in all circumstances
• Separately lists each major item of operating cash payments
• Separately lists each major item of operating cash receipts
• Reports net income and then adjust it for items necessary to determine net cash provided or used by operating activities
4. One of several ratios that reflects solvency includes the:
• Days' sales in inventory
• Times interest earned ratio
• Total asses turnover
• Acid-test ratio
• Current ratio
5 .Common size statement:
• Show the dollar amount of change for financial statement items
• Reveal patterns in data across successive periods
• Compare financial statements over time
• Reveal changes in the relative importance of each financial statement item
• Do not emphasize the relative importance of each item