Question
Which of the following should be deducted from net income in reconciling net income to net cash flows from (used for) operating activities? a. Preferred
Which of the following should be deducted from net income in reconciling net income to net cash flows from (used for) operating activities?
a. Preferred dividends declared and paid
b. A decrease in accounts receivable
c. A decrease in prepaid insurance
d. A decrease in accounts payable
Which of the following statements about the quick ratio is true?
a. It is computed as quick assets multiplied by current liabilities.
b. The numerator includes cash, inventory, and short-term investments.
c. It is a suitable measure to derive the profitability of the company.
d. If it is less than 1.0, it raises liquidity concerns for creditors.
While calculating the carrying value of a building, its accumulated depreciation is _____.
a. subtracted from the fair market value of the building
b. subtracted from the building's cost
c. added to the building's cost
d. not taken into consideration
Which of the following should be added to net income in reconciling net income to net cash flows from (used for) operating activities?
a. A decrease in accounts payable
b. A gain on the sale of land
c. Dividends paid on common stock
d. An increase in wages payable
Depreciation on factory equipment would be reported in _____.
a. a reconciliation of net income and net cash flows from (used for) operating activities
b. the investing activities section of the statement of cash flows
c. the financing activities section of the statement of cash flows
d. None of these choices are correct.
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