QUESTION 6

1. Where on the balance sheet is the ending retained earnings balance transferred?

   		revenue
   		assets
   		liabilities
   		stockholders' equity

QUESTION 7

1. Which of the following decreases the balance of retained earnings?

   		dividends
   		accounts receivables
   		asset distributions
   		net income

QUESTION 8

1. Wilson Consulting is seeking a $500,000 loan from National Bank to purchase land for an office building. The banks loan officer asks numerous questions based on the balance sheet to determine the risk of providing the loan. Which question about information on the balance sheet best addresses the liquidity of Wilson Consulting?

   		How long has the firm been in business?
   		What are the firms debts and obligations?
   		How often are profits distributed to stockholders?
   		What are the firms average monthly revenues?

QUESTION 9

1. The document shown below is used by investors to determine whether a firm has enough earnings to pay shareholder dividends and support future growth. What is this document known as:

   		income statement
   		statement of retained earnings
   		balance sheet
   		cash flow statement

QUESTION 10

1. Which number is transferred from the income statement to the statement of retained earnings?

   		gross profit
   		cost of goods sold
   		net income
   		total expenses

QUESTION 11

1. Which of the four financial statements is the second to be prepared?

   		balance sheet
   		statement of cash flows
   		statement of retained earnings
   		income statement

QUESTION 12

1. A group of potential investors in A&E Software are reviewing the firm's statement of cash flows. The investors are specifically focusing on whether A&E is able to generate net cash by selling its software products. Which section on the statement of cash flows would provide this information?

   		sales
   		operating
   		financing
   		investing

QUESTION 13

1. A group of potential investors in A&E Software are reviewing the firms statement of cash flows. The investors are specifically focusing on the firms cash flows from operating activities. What can the investors determine by reviewing this section of the cash flow statement?

   		The investors can determine whether A&E repays debts and pays dividends with cash on a regular basis.
   		The investors can determine whether A&E generates net cash inflows from selling its software products.
   		The investors can determine whether A&E raises most of its available cash by borrowing from creditors.
   		The investors can determine whether A&E uses available cash to replace existing facilities and equipment.

QUESTION 14

1. A group of potential investors in A&E Software want to know how the firm generates and uses available cash. Which of the following reports would be the best source for this information?

   		statement of retained earnings
   		statement of cash flows
   		balance statement
   		income statement

QUESTION 15

1. On a statement of cash flows, the cash flow from investing activities section includes all cash transactions related to what?

   		paying salaries and taxes
   		repaying loans to creditors
   		buying property and equipment
   		issuing capital stock

QUESTION 16

1. Which of the following are the sections that appear on the balance sheet? (Select all that apply.)

   		net income
   		liabilities
   		assets
   		stockholders' equity
   		capital stock

QUESTION 17

1. Consider the following scenario:

   1. During the fourth quarter of the year, Carl's Carpet Cleaning received $4,000 from customers in exchange for providing carpet cleaning services.
   2. During the same time, carpet cleaning supplies were $1,000, and wages were $2,000.
   3. The business has $5,000 in total assets.

   Which of the following would the company delcar on an income statement?

   		$4,000 revenue
   		$1,000 net loss
   		$2,000 expenses
   		$9,000 net income

QUESTION 18

1. You are the accountant for Pacific Paper and preparing the firms statement of cash flows. Which of the following would you categorize as cash flows from investing activities?

   		$55,000 paid for monthly employee wages
   		$98,000 received for selling processing equipment
   		$25,000 received from a bank loan
   		$10,000 paid in dividends to shareholders

QUESTION 19

1. Of the likely audiences for the annual report, which party is most interested in the companys ability to pay for goods and services it purchases?

   		employees
   		customers
   		vendors
   		investors

QUESTION 0

1. Which number from the balance sheet is used to reconcile the ending balance on the statement of cash flows?

   		capital stock
   		cash
   		accounts receivable
   		assets