QUESTION 20

1. The relationship between revenue from selling inventory and the cost of that inventory is measured as:

   	a.	Net income.
   	b.	Gross profit.
   	c.	Income before taxes.
   	d.	Operating income.

2. QUESTION 16

3. Tammy wants to buy a car that costs $10,000 and wishes to know the amount of the monthly payments, which will be made at the first of the month, with interest of 12% on the unpaid balance. She should use a table for the:

   	a.	Present value of $1.
   	b.	Present value of an ordinary annuity of $1.
   	c.	Present value of an annuity due of $1.
   	d.	Future value of an annuity due of $1.

4. 2.5 points

   QUESTION 17

5. In comparing the direct method with the indirect method of preparing the statement of cash flows:

   	a.	only operating activities are presented differently.
   	b.	only investing activities are presented differently.
   	c.	only financing activities are presented differently.
   	d.	all activities are presented differently.

6. 2.5 points

   QUESTION 18

7. In the operating activities section of the statement of cash flows, we start with net income:

   	a.	in the direct method.
   	b.	in the indirect method.
   	c.	in both the direct and the indirect methods.
   	d.	in neither the direct nor the indirect methods.