Question
I) Which of the following would be classified as a liability? a) A customer prepaying for an order b) The payroll you owe your employees
I) Which of the following would be classified as a liability?
a) A customer prepaying for an order
b) The payroll you owe your employees to be paid later in the month
c) The income tax you have yet to pay the IRS
d) The money a customer owes you and promises to pay next week
e) a, b and d
f) a, b and c
g) b, c and d
II) A company might repurchase stock for all the following reasons except:
a) It wants to profit from buying stock low and selling high
b) Management wants to decrease earnings per share
c) Management wants to avoid a takeover by another party
d) Company intends to use the shares as part of an employee stock purchase plan
III) Buying a new delivery truck to support the business operations would be an example of which of the following:
a) Cash flow from operations
b) Cash flow from investing activities
c) Cash flow from financing activities
d) Impossible to determine from the information provided
IV) If the firm pays a dividend, it would be an example of a cash flow associated with which type of activity?
a) Investing
b) Financing
c) Operating
d) Impossible to determine from the information provided
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