Multiple choice 5.1 Which of the following is a cash flow from investing activities? A) Issuing common stock in exchange for cash B) Paying a dividend to its shareholders C) Repaying amounts borrowed from banks D) Selling shares of a competitor

Multiple choice 5.2 Using the periodic system, cost of goods is computed as: A) beginning inventory + acquisitions B) beginning inventory + acquisitions - ending inventory C) beginning inventory + ending inventory + acquisitions D) beginning inventory + ending inventory - acquisitions

Multiple choice 5.3 On July 1, 2020, a merchant company paid in advance 36,000 for the rent of a warehouse. The payment in advance is for the period July 1 2020 to June 30 2021. At the end of 2020 the prepaid expense balance will be: A) Credit 36,000. B) Debit 36,000. C) Credit 18,000. D) Debit 18,000. Multiple choice

5.4 If management of a company intentionally underestimates bad debt expense for a period (i.e. underestimating uncollectible accounts), then: A) Net profit is understated and net accounts receivable are understated B) Net profit is understated and net accounts receivable are overstated C) Net profit is overstated and net accounts receivable are understated D) Net profit is overstated and net accounts receivable are overstated