QUESTION 30

Which of the following statements is incorrect about the statement of cash flows?

		It may be prepared on the cash or accrual basis.
		It provides information about cash inflows and cash outflows of a business entity during the period.
		It provides information about operating, investing, and financing activities of a business entity.
		It is a fourth basic financial statement.

QUESTION 31

The accrual basis of accounting recognizes revenues when

		performance obligations are satisfied, and expenses when the costs are incurred.
		cash is received, and expenses when the costs are incurred.
		cash is received, and expenses when cash is paid.
		performance obligations are satisfied, and expenses when cash is paid.

QUESTION 32

When a company pays a cash dividend that it previously declared (recognizing a liability), which of the following is true?

		Stockholders' equity is decreased.
		Liabilities are decreased.
		Assets are increased.
		None of the above.

QUESTION 33

Entity H recorded salary expense of $130,000 in 2019. However, additional salaries of $5,000 had been earned, but not paid or recorded at December 31, 2019. After the necessary adjustments are recorded and posted at December 31, 2019, the balances in the Salaries Expense and Salaries Payable accounts will be: Salaries Expense; Salaries Payable

		$125,000; $5,000
		$135,000; $ -0-
		$135,000; $5,000
		$130,000; $5,000