ACCT 2323 Study Guide - Quiz Guide: Cash Flow Statement, Cash Flow, Net Income
Ch 21, 22 Quiz
Attempt #1
1. If, on the comparative balance sheet, Accounts Payable has increased, the
amount of increase would be: Added to net income on the statement of
cash flows (indirect method)
2. Carmen’s net income was $60,000. Other accounts that changed included: AR
decreased by $33,000; Merchandise inventory increased by $21,000; AP
increased by $10,000; and Salaries Payable increased by $1,000. The amount
of net cash flow from Operating Activities using the indirect method is:
$83,000
3. If a company issues a comparative balance sheet showing the change in the
cash balance, a statement of cash flows is not needed. False
4. The accuracy of the statement of cash flows, regardless of method use, can be
verified by computing the change in the balance of: cash
5. If 2,000 shares of stock were sold for $10 per share; cash flow from financing
activities would increase $20,000. True
6. In a comparative balance sheet, the ending Cash for 2015 was $405,000 and
is $323,000 for 2016. The net increase or decrease from 2015 to 2016 is:
(20.00)%
7. The revenue of Carol’s Environmental Service for Years 1, 2, and 3 are
$49,000, $67,000 and $87,000, respectively. Year 1 is the base year. The
trend percentage for Year 3 is: 177.55%
8. Using just a base year and one additional year is not sufficient to do a long-
term trend analysis of accounts. True
9. The ratios that measures a company’s mix of debt and equity financing are
known as: Debt Management Ratios
10. If the average collection period is 35 days, this means: from the date of sale
to the date of receipt of payment is 35 days.
11. If management wishes to measure how effectively the assets were used in
generating a profit, they could use the: rate of return on total assets
12. Which of the following ratios measures the earnings of a company on each
sales dollar? Return on sales.
13. Accounts receivable on January 1 was $34,000 and at the end of the year it
was $54,000. Net credit sales were $166,000. Accounts receivable turnover
is: 3.77 times.
14. The income before taxes and interest expenses of Barry Builders for the year
just ended is $219,000. Their interest expense is $21,000 and their income
taxes are $84,500. The number of times interest would be earned is: 10.43
15. A low debt to total assets ratio reduces a creditor’s risk if liquidation occurs.
True
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Document Summary
If, on the comparative balance sheet, accounts payable has increased, the amount of increase would be: added to net income on the statement of cash flows (indirect method: carmen"s net income was ,000. Other accounts that changed included: ar decreased by ,000; merchandise inventory increased by ,000; ap increased by ,000; and salaries payable increased by ,000. The amount of net cash flow from operating activities using the indirect method is: 3: the accuracy of the statement of cash flows, regardless of method use, can be. 6. verified by computing the change in the balance of: cash. If 2,000 shares of stock were sold for per share; cash flow from financing activities would increase ,000. In a comparative balance sheet, the ending cash for 2015 was ,000 and is ,000 for 2016. The net increase or decrease from 2015 to 2016 is: (20. 00): the revenue of carol"s environmental service for years 1, 2, and 3 are.
