St of FP and CF

On the statement of financial position all of the following are reported as investments except

  

• Bonds, ordinary shares, and long-term notes.

• Non-controlling interest.

• Pension funds.

• Non-consolidated subsidiaries.

The following information is taken from Kohler Company’s trial balance:

Receivables due from employees (due in 4 years) £ 60,000

Prepaid advertising                                                      45,000

Trading securities (fair value)                                      57,000

Kohler will report current assets of

• £105,000.

• £117,000.

• £162,000.

• £102,000.

Each of the following is an intangible asset except

• copyrights.

• goodwill.

• plant expansion fund.

• trademarks.

The amount of time that is expected to elapse until an asset is realized or otherwise converted into cash is referred to as 

• solvency.

• financial flexibility.

• liquidity.

• exchangeability.

A limitation of the statement of financial position that is not also a limitation of the income statement is

• the use of judgments and estimates

• omitted items

• the numbers are affected by the accounting methods employed

• valuation of items at historical cost

A generally accepted method of valuation is

1.   prepaid expenses at fair value.

2.   accounts receivable at net realizable value.

3.   inventories at lower-of-cost-or-net realizable value.

• 1

• 2

• 3

• 2 and 3

Which of the following statements is incorrect?

• A high amount of net cash provided by operating activities indicates that a company is able to generate sufficient cash from operations to pay its bills without further borrowings.

• Companies that have strong financial flexibility can take advantage of profitable investments even in tough times.

• The higher the current cash debt coverage, the less likely a company will have liquidity problems.

• Substantial decreases in receivables or inventory can explain the difference between positive net income and negative cash provided by operating activities.

In preparing a statement of cash flows, cash flows from operating activities

• are always equal to accrual accounting income.

• are calculated as the difference between revenues and expenses.

• can be calculated by appropriately adding to or deducting from net income those items in the income statement that do not affect cash.

• can be calculated by appropriately adding to or deducting from net income those items in the income statement that do affect cash.

In a statement of cash flows, proceeds from issuing equity instruments should be classified as cash inflows from

• lending activities.

• operating activities.

• investing activities.

• financing activities.

  Keisler Corp reports:

Cash provided by operating activities TL200,000

Cash used by investing activities 110,000

Cash provided by financing activities 140,000

Beginning cash balance 90,000

What is Keisler's ending cash balance?

• TL250,000.

• TL320,000.

• TL470,000.

• TL540,000.