| A. debit to Paid-in Capital in Excess of ParCommon for $100. | | B. credit to Common Stock for $900. | | C. debit to Common Stock for $800. | | D. credit to Common Stock for $800. | | 2. Tucker Enterprises' Accounts Receivable increased by $48,000, and its Accounts Payable increased by $27,000. What is the net effect on cash from operations under the indirect method? | | A. +$21,000 | | B. $75,000 | | C. $21,000 | | D. +$75,000 | | | 3. A/ An _______ is added back to net income in the operating section of an indirect cash flow statement. | | A. depreciation | | B. increase in accounts receivable | | C. decrease in accounts payable | | D. increase in inventory | | | 4. A business's Accounts Payable balance has decreased during the year. How would this affect the statement of cash flows operations section under the indirect method? | | A. It would be subtracted from net income. | | B. It does not affect the cash flow from operations. | | C. It would be added back to net income. | | D. It is already included in the net income. | | 5. For the years 2012, 2013, and 2014, the sales of Red Line, Inc. are $40,000, $60,000 and $80,000, respectively. If 2012 is the base year, the trend percentage for 2013 was | | A. 200%. | | B. 0%. | | C. 133%. | | D. 150%. | | | | 6. The following information is available for Allsport Company: | Cost of goods sold | $545,000 | | Merchandise inventory, 12/31/13 | $105,000 | | Merchandise inventory, 12/31/14 | $112,000 | | Accounts payable, 12/31/13 | $98,500 | | Accounts payable, 12/31/14 | $101,300 | What amount was paid for merchandise during 2014? | | A. $540,800 | | B. $545,000 | | C. $554,800 | | D. $549,200 | | 7. Tucker, Inc.'s net sales decreased from $90,000 in year one to $45,000 in year two, and its cost of goods sold decreased from $30,000 in year one to $20,000 in year two. The vertical analysis based on sales for cost of goods sold for the two periods (rounded to nearest tenth of a percent) is | | A. 300% and 225%. | | B. 44.4% and 33.3%. | | C. 225% and 300%. | | D. 33.3% and 44.4%. | | 8. On the income statement, extraordinary items are reported | | A. net of income tax or net of income tax savings. | | B. immediately before the discontinued operations section. | | C. before the operating income section. | | D. immediately after the continuing operations section. | | 9. Of the following, which is not classified as an investing activity on the statement of cash flows? | | A. Collecting the principal on loans | | B. Purchasing land | | C. Sale of equipment for cash | | D. Selling goods and services | | | | | | 10. An example of a cash outflow from investing activities is | | A. the purchase of treasury stock. | | B. making a loan to another company. | | C. issuance of a note payable. | | D. paying cash dividends. | | | | |
