1. An increase in the long-term notes payable is reported on the statement cash flows as
a) Cash from Operations
b) Cash from Investing Activities
c) Cash from Financing Activities
d) An increase in long-term notes payable is not reported on the statement of Cash flows.
2. Which of the following statements about expenses are true under accrual basis of accounting?
a) Expenses represent the resources an organization uses during a period of time.
b) All expenses reflect cash outflows by the organization at the time they are recognized.
c) Expenses cannot be incurred before an organization pays for a resource.
d) Expenses result in a decrease in net assets for a non-profit organization.
3. Which of the following conditions must be met before revenue is recognized?
a) goods and/or services must be delivered to the customer
b) the amount to be collected must be objectively measurable
c) the customer must be happy with the service
d) there can be no possibility that the customer will not pay the bill
4. Which of the following statements about bad debts are true?
a) the amount of money in the allowance for bad debts must be equal to the current year’s bad debt expense
b) the amount of money that is written off in a given year must be equal to that year’s bad debt expense
c) the amount of money added to the allowance bad debts must be equal to the current year’s bad debt expense.