13. A cumulative dividends preference means that:

A. preferred stockholders are paid dividends before common stockholders are paid dividends for the current year only.

B. unpaid dividends to preferred stockholders accumulate and must be paid before common stockholders receive dividends.

C. preferred stockholders are paid their full fixed dividend rate each period as long as the company is in operation.

D. unpaid cash dividends to preferred stockholders must be replaced with stock dividends during the current period.

14. Jacks Company's purchase of 100 shares of Cord Inc. common stock would be reported as a financing activity on its statement of cash.

True

False

15. Depreciation Expense is not reported on the statement of cash flows when prepared using the direct method

True

False

16. Using the t-account approach to preparing the statement of cash flows, an increase in accounts payable would appear on the debit side of the cash account

True

False

17. Which of the following statements about the statement of cash flows is not right?

A. It does not replace the income instatement

B. It provides details as to how cash changed during a period

C. it provides information about cash receipt and cash payments over a period of time

D. it measures profitability

18. Which of the following is not included in the cash and cash equivalents amount reported on the balance sheet?

A. Money market funds

B. Checking accounts

C. Treasury bills

D. Notes receivable due in 90 days

19. During the year, the company recorded services provided to customers on account. What effect will this transaction have on the debt-to-assets and times interest earned ratios?

A. Debt-to-assets ratio will decrease and the times interest earned will increase

B. debt-to-asset ratio will increase and the times interest earned will not change

C. Both ratios will decrease

D. both ratios will increase.

20. John purchased 1 share of $10 par value common stock form Utah Corporation for $50 per share. John sold that share to Stan for $60 per share. As a result of the sale by John to Stan, Utah Corporation would:

A. debit cash and credit additional paid-in capital for $10

B. debit cash and credit common stock for $10

C. debit common stock and credit additional paid-in capital for $10

D. not debit or credit any of its accounts