Accounting and Finance Quiz

In which section of a statement of cash flows would the payment of cash dividends be reported?

• Investing activities

• Operating activities

• Financing activities

• Dividends are not reported

Stosch Company's net income for Year 2 if beginning RE = 13,000, ending RE = 18,000, dividend = 14,000?

• $13,000

• $17,000

• $19,000

• $21,000

Fancy Foods: Cash paid to settle A/P? (Operating expenses $12,000, A/P beg $5,000, A/P end $4,000)

• $24,000

• $13,000

• $96,000

• $156,000

Wilson Company accrued interest: Year 1 income statement not affected?

• True

• False

Wilson Company accrued interest: Statement of cash flows shows $70,000 inflow from investing?

• True

• False

Accruing interest expense increases a liability?

• True

• False

Accruing interest expense is a claims-exchange transaction?

• True

• False

Both assets and stockholders’ equity decreased due to accrued interest?

• True

• False

Gomez Company collected $9,000 in advance for one-year services. Revenue reported Year 1; Cash flows?

• $3,000; $9,000

• $9,000; $9,000

• $3,000; $3,000

• $0; $9,000

A firm that primarily sells merchandise to other businesses is called:

• Retail firm

• Wholesale firm

• Service firm

• Consulting firm