The statement of cash flows explains how a company generates and uses cash during an accounting period.
Which of the following is an example of a cash flow from operations? the sale of merchandise inventory for
cash
In the terminology of the statement of cash flows, which of the following is an example of an investing
activity? the purchase of land for a new factory
In the terminology of the statement of cash flows, which of the following is an example of a financing activity?
the repayment of long-term debt
On the statement of cash flows, the payment of $50,000 in dividends would be classified as a(n) financing
activity
On the statement of cash flows, the payment of $40,000 in interest would be classified as a(n): operating
activity.
A company sells a piece of equipment and realizes a gain of $15,000. At the time of the sale, the equipment,
which had been purchased for $185,000, had accumulated depreciation which totaled $120,000. The proceeds
from the sale must have been: $80,000
obook value + gain = cash received… 185,000 – 120,000 = 65000, 65000+ 15000 = 80000
A balance in deferred tax expense due within three years would be reported as what on the balance sheet?
long term liability
A company offers customers a one year warranty and sales totaled $950,000 for the year. The estimated
product warranty is 2% of sales and the company incurred repair costs of $14,000 this year. Which entry
would be made to record accrued product warranty.
d. Warranty Expense 19,000
Warranty Payable 19,000
A contingent liability should be recorded in the accounts if it ____.
a. Is probable
c. Can be reasonably estimated
d. Both a and c
Which of the following is a right of stock ownership? Each of the items is correct are stockholder rights
The number of shares of stock held by the stockholders is called ____. Outstanding stock
One preference right enjoyed by preferred stockholders is ____. Preference to dividends
Eagle Eye, Inc. issued 20,000 shares of $20 par common stock at $50. Which journal reflects this transaction?
b. Cash 1,000,000
Common stock 400,000
Paid-in capital in excess of par 600,000
Ed. Corp.
Assume Ed. Corp. has 50,000 shares of $10 par stock issued and outstanding. Ed. purchases 2,000 shares of treasury
stock at $20 per share.]
Refer to Ed. Corp. Record the journal entry to reflect this transaction.
b. Treasury stock 40,000
Cash 40,000
Refer to Ed. Corp. If 1,000 shares of this treasury stock were resold at $30 per share, record the journal entry.
c. Cash 30,000
Treasury stock 20,000
Paid-in capital treasury stock 10,000
Refer to Ed. Corp. If at a later date 500 shares of the treasury stock were sold at $15. Record this journal entry.
