Question 1 (1 point) Land was sold for $25.000 resulting in a gain of $5,000. Where would the cash proceeds of the sale be classified on the Cash Flow Statement? Investing activity Not included on the Cash Flow Statement Operating activity Financing activity Question 2 11 point When a corporation issues more than one new share in the place of each share previously outstanding it is a: Share redemption. Share dividend. Stock split Share subscription Question 4 (1 point) Once calculated, financial statement ratios, themselves, are not necessarily meaningful in evaluating a company. Often, to judge performance, you must have a basis for comparison, which of the following could you use to compare corporate financial performance. O Intracompany Competitor Rules of Thumb Question 5 (1 point) What is an advantage of forming a corporation? Less government regulations Limited Life Limited liability Mutual Agency Question 6 (1 point) Preferred shares for which the right to receive dividends is lost in any one year in which dividends are not declared are: Nonconvertible preferred shares. Non-cumulative preferred shares. Callable preferred shares. Cumulative preferred shares Question 7 (1 point) The distribution of a 20% share dividend on common shares: O Reduces the amount of retained earnings and increases the amount for common shares. Does not change the number of common shares outstanding. Decreases total shareholders' equity. Increases the net assets of the corporation Question 8 (1 point) ABC corporation paid $100,000 in organization costs. How should these costs be recorded A liability is created Expensed on the income statement This entry is not recorded, but included in the notes to the financial statements Recorded as an asset and depreciation over the life of the corporation Question 9 (1 point) XYZ Corporation purchased equipment costing $25,000. The company paid $5,000 cash and the remaining $20,000 was financed with a long-term notes payable. How should the $20,000 be accounted for in the statement of cash flows? An increase in the financing section A decrease in the financing section. A decrease in the investing section. Disclosed in the notes of the financial statements. Question 10 (1 point) The category of equity for a corporation which represents the cumulative profits less losses and dividends is called: Retained earnings Financial leverage Contributed capital. Preferred shares