ACC 2303 Exam 4 Review

Stock dividends are reported in connection with a statement of cash flows as:

• Financing activity

• Investing activity

• Noncash activity

• Not reported on the statement of cash flows

The following are all advantages of a corporation EXCEPT...

• Can raise more capital than a partnership

• Separation of ownership and management

• Continuous life and ease of transferring ownership

• Limited liability to stockholders

Interest paid to bondholders is reported in connection with a statement of cash flows as:

• Operating activity

• Investing activity

• A noncash activity

• Not reported on the statement of cash flows

Issued - __________ = Outstanding Shares

• Authorized

• Treasury

• Common

• Preferred

In determining cash flows from operating activities, adjustments to net income should NOT include:

• An addition for depreciation expense

• A deduction for bond premium amortization

• A deduction for a gain on sale of equipment

• An addition for patent amortization

The following are all rights of stockholders EXCEPT...

• Vote

• Guaranteed dividend

• Liquidation

• Preemption

True or False: Stockholder's Equity is composed of Retained Earnings and Common Stock.

• True

• False

ABC Co. sold a printer with a cost of $34,000 and accumulated depreciation of $21,000 for $10,000 cash. This transaction would be reported as:

• $10,000 add to investing and $10,000 add to operating

• $10,000 add to investing and $3,000 deduction from operating

• $34,000 add to investing

• $10,000 add to investing and #3,000 added to operating

Which of the following represents a corporations' own stock that has been reacquired and is being held for future use?

• Common

• Preferred

• Treasury

• Outstanding

In a statement of cash flows, a decrease in inventory should be reported as...

• A deduction from net income in determining cash flows from operating activities

• An addition to net income in determining cash flows from operating activities

• An investing activity

• Not reported because this transaction does not affect cash