1. Diluted earnings per share shows dilution resulting from additional shares that may be issued for stock options or bonds that may be converted to shares of common stock in the future.

   		True
   		False

2. Denver Company prepares its statement of cash flows using the direct method and engaged in the following transactions during 2017:

Transaction 1. Denver retired bonds payable by issuing common stock.

Transaction 2. Denver collected cash for sales to customer.

Transaction 3. Denver issued a stock dividend.

Transaction 4. Denver paid a cash dividend.

Transaction 5. Denver paid the principal of a long-term note payable.

Which of these transactions or parts of these transactions would be included in the operating activity section of the statement of cash flows?

		Transaction 2
		Transaction 5
		Transaction 4
		None of these choices is correct.

3. The result of changing from FIFO to average cost for inventory valuation is

		included in operating revenues and expenses.
		included in other revenues or expenses.
		handled retrospectively where financial statements have to be restated.
		ignored.

4. When companies construct their own long-lived assets, all costs required to get the asset into operating condition must be

		expensed immediately.
		included in the long-lived asset's cost.
		recognized as a maintenance cost.
		treated as a cost necessary to maintain the plant asset's current level of productivity.
		None of these choices is correct.

5.

When a plant asset is sold, its original cost and its

		market value must be removed from the accounting records.
		accumulated depreciation must be removed from the accounting records.
		salvage value must be expensed immediately.
		related maintenance costs must be transferred to the income statement immediately.

PLEASE ANSWER ASAP