7 simple accounting questions

1)

If a bank loan increases from period one to period two, what happened to cash flow?

Select one:

a.Cash flow increases

b.Cash flow remains the same

c.None of the choices

d.Cash flow decreases

2)

An increase in accounts receivable from one year to the next

Select one:

a.increases cash flow

b.decreases cash flow

c.none of the choices

d.does not affect cash flow

3)

A company's long-term investments account has a beginning balance of $100,000 and an ending balance of $60,000. The company's income statement reports a gain on sale of long-term investments of $10,000. How much is cash received from the sale of long-term investments? Assume that no additional investment is purchased in the accounting period.

Select one:

a.$50,000

b.$60,000

c.$40,000

d.$30,000

4)

The financing activities section of the cash flow statement

Select one:

a.is prepared differently under the direct method and the indirect method

b.shows a decrease in cash flow when a machine is purchased

c.tracks cash received from and paid back to investors and lenders

d.None of the available choices

5)

Selling a long-term asset increases cash flow because

Select one:

a.depreciation is credited

b.the asset is sold on credit

c.cash is received

d.the net book value of long-term assets increases

6)

The loss on sale of long-term investments

Select one:

a.is added to the cost of the sold investment to determine the amount of cash received from the sale of long-term investments

b.is deducted from the cost of the sold investment to determine the amount of cash received from the sale of long-term investments

c.reduces the amount of cash received but increases the book value of the long-term investments account

d.is not taken into consideration when preparing a statement of cash flow

7)

The amount of cash received from a sale of property, plant and equipment with depreciation can be determined from

Select one:

a.the statement of owners' equity

b.both the comparative balance sheet and income statement

c.the income statement only

d.the comparative balance sheet only