When preparing a statement of cash flows on the indirect method, each of the following should be classified as an operating activity cash flow except:

An increase in accounts receivable

A decrease in accounts payable

A gain from disposal of a long-term asset

An increase in prepaid expenses

A decrease in accrued expenses payable

Employees earn vacation pay at the rate of one day per month. During July, 25 employees qualify for one vacation day each. Their average daily wage is $100 per day. What is the amount of vacation benefit expense to be recorded for the month of July?

$25

$100

$250

$2,500

$25,000

A company issued 5-year, 7% bonds with a par value of $100,000. The market rate when the bonds were issued was 6.5%. The company received $101,137 cash for the bonds. Using the effective interest method, the amount of recorded interest expense for the first semiannual interest period is:

$3,500.00

$7,000.00

$3,286.95

$6,573.90

$1,750.00

A partner can withdraw from a partnership by:

Selling his/her interest to another person for cash

Selling his/her interet to another person in exchange for assets

Receiving cash form the partnership in the amount of his/her interest

Receiving assets from the partnership in the amount of his/her interest

All of these

Employers must keep certain payroll records, including individual earnings reports for each employee.

True or False