1. During 2015, the accounts receivable balance of Dickerson Corp. increased. Which of the following statements is true?
a. This increase is added to sales recognized on the income statement to determine the cash collections from customers during the period.
b. This increase is added to net income in the operating activities section of a statement of cash flows prepared under the indirect method.
c. This increase is considered only when the operating activities section of a statement of cash flows is prepared under the indirect method.
d. This indicates that Dickerson sold more than it collected in cash during the period.
2. When using the indirect method, how is the issuance of stock to retire a long-term debt shown on a statement of cash flows?
a. Investing activity
b. Operating activity
c. Noncash investing or financing activity
d. Financing activity
3. Dallas Corp. reported the following information for 2015 and 2016.
Interest receivable, December 31, 2015 $1,100
Interest receivable, December 31, 2016 1,400
Interest income--2016 3,200
How much cash was received for interest during 2016?
a. $3,500
b. $2,900
c. $3,200
d. $3,800
4. The cash-to-cash operating cycle is the number of days' sales in:
a. inventory and receivables.
b. receivables and plant assets.
c. inventory and plant assets.
d. receivables and working capital.
5. Crimson Company declared and paid $1,000,000 in dividends to the common stockholders. The effect of this transaction is that the:
a. current ratio increased.
b. debt-to-equity ratio increased.
c. earnings per share decreased.
d. earnings per share increased.