MULTIPLE CHOICE QUESTIONS (20 POINTS) 1. Assume that 10.000 shares of TL10 par value are issued and sold for TL11. Additional paid in capital will be; a. debited by TL 100.000 b. debited by TL 110.000 C. credited by TL 10.000 d. credited by TL 100.000 are the stocks of a corporation that were issued, but that were later purchased back by the company. a. treasury stocks b. paid-in-capital c. preferred stocks d. additional paid-in-capital 2. 3. Collections of accounts receivable are included in which category of the cash flow statement? a. Operating Activities b. Investing Activities c. Financing Activities d. None of the above 4. Cash transactions are classified into three major categories in a cash flow statement. Which of the following is not one of these three categories? a. Collecting Activities b. Operating Activities c. Investing Activities d. Financing Activities For questions 5-6 and 7 use the information below: Indicate which of the following line items taken from the cash flow statement would be added (+), subtracted (-) or not included (NA) in the cash flow from operations section when the direct method is used. 5. Increase in inventories..... 6. Purchase of plant and equipment for cash. 7. Payment of taxes to government.. (+) or (-) or (NA) (+) or (-) or (NA) (+) or (-) or (NA) 8. A financial analyst prepared the following tavle for Dentafirm Company: 2013 Net Sales Net Income 2012 100 100 104 104 2014 126 121 2015 144 133 The analytical technique used is a. Vertical Analysis b. Horizontal Analysis c. Component Analysis d. Ratio Analysis 9. In evaluating a company's ability to repay a 90-day loan, which of the following the bank would probably be most interested in? a. Debt Ratio b. Quick Ratio c. Inventory Turnover d. ROA 10. The current ratio is especially important for: a. Preferred Stockholders b. Common Stockholders c. Short-Term Creditors d. Long-Term Creditors