CASH PROVIDED BY OPERATING ACTIVITIES:

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Cash provided by operating activities:
Question 1 options:
may be larger than net income.
equals the change in cash for the year.
decreases when long-term debt is repaid.
summarizes cash flows relating to the purchase and disposal of long-lived assets.
Bottom of Form
Question 2 (1 point)
Nancy's Cookie Shop reported equipment at $120,000 and $30,000 accumulated depreciation on
its December 31, 2013, balance sheet. During 2014, the shop purchased equipment costing
$30,000 and sold equipment costing $10,000 (book value $4,000) for $1,000. On December 31,
2014, net equipment was $98,000. Using the indirect method, Samantha's would report
depreciation expense on its statement of cash flows for 2014 of:
Question 2 options:
$14,000.
$22,000.

$18,000.
$30,000.
Short-term liquidity ratios include the:
Question 3 options:
acid-test ratio.
debt to total assets ratio.
profit margin ratio.
payout ratio.
Sunshine Paint reported sales of $500,000, total assets of $300,000, total owners' equity of
$160,000, current assets of $100,000, current liabilities of $40,000, and cash of $30,000. In a
common-size analysis of the balance sheet, cash would be shown as:
Question 4 options:
10%.
30%.
50%.
6%.

The use of common-size analysis financial statements is an example of:
Question 5 options:
liquidity analysis.
ratio analysis.
horizontal analysis.
vertical analysis.
The purchase of an office building by issuing long-term notes payable should be reported as a:
Question 6 options:
cash outflow in the investing section of the statement of cash flows.
cash outflow in the financing section of the statement of cash flows.
noncash investing and financing activity.
cash outflow in the operating section of the statement of cash flows.
Which of the following is a solvency ratio?
Question 7 options:

Asset turnover ratio.
Debt to total assets ratio.
Return on assets ratio.
Acid-test ratio.
Wilson Company had inventory of $660,000 and $540,000 on December 31, 2013, and
December 31, 2014, respectively. Cost of goods sold for 2014 was $4,200,000. Average days to
sell the inventory is approximately:
Question 8 options:
46.9.
52.1.
57.4.
6.4.
Which of the following statements is true?
Question 9 options:
The acid-test ratio applies to manufacturing companies but not to service or retailing
businesses.

High asset turnover is a sign of efficient use of assets.
The current ratio measures the current profitability of the owners' investment.
The price-earnings ratio is a long-term solvency ratio.
In the statement of cash flows, the activities that affect cash flows are listed in the following
order:
Question 10 options:
operating, financing, investing.
operating, investing, financing.
financing, operating, investing.
investing, financing, operating.
A transaction involving a loss on the disposal of equipment with the indirect method of
presentation affects cash provided (used) by:
financing activities and investing activities.
operations and financing activities.
operations, financing activities, and investing activities.

operations and investing activities.
One major purpose of the statement of cash flows is to provide information about:
changes in retained earnings.
the firm's cash receipts and payments during a period.
the firm's profitability.
the firm's resources and claims against those resources.
One cost which is part of both manufacturing overhead and total manufacturing costs is:
selling and administrative costs.
direct materials.
factory utilities.
direct labor.
Manufacturing costs are typically classified as:

direct materials, direct labor, or manufacturing overhead.
product costs or period costs.
direct materials, direct labor, or selling and administrative.
direct materials or direct labor.
A credit balance in the Manufacturing Overhead account at the end of an interim month means
that:
corrective action by management is necessary.
the balance should be reported as a prepaid expense in the monthly balance sheet.
overhead has been overapplied.
cost of goods sold should be debited on the monthly income statement.
In a job order cost system, which of the following accounts is not a control account?
Finished Goods Inventory.

Factory Labor.
Manufacturing Overhead.
Raw Materials Inventory.
A job order cost system would most likely be used by a(n):
specialty printing company.
paint manufacturer.
automobile manufacturer.
cement manufacturer.
The formula for computing a predetermined overhead rate is:
estimated annual overhead costs ÷ estimated annual operating activity.
estimated annual overhead costs ÷ actual annual operating activity.
actual annual overhead costs ÷ actual annual operating activity.

actual annual overhead costs ÷ estimated annual operating activity.
An example of a period cost, as opposed to a product cost, is:
factory utilities.
wages of factory workers.
depreciation on the factory building.
salesperson's commissions.
When there is beginning work in process, units transferred out are computed by subtracting:
ending work in process units from the units started into production.
beginning work in process units from the units to be accounted for.
ending work in process units from the units accounted for.
beginning work in process units from the units started into production.
A production cost report contains sections for:

costs accounted for.
units to be accounted for.
unit costs.
All three of the other choices are correct.
Which of the following does not describe a characteristic of process costing?
Once production begins, it continues until the finished product emerges.
All units of production receive precisely the same amount of material, labor, and
overhead.
Job cost sheets must pass from one production department to the next on a daily basis.
Work in process accounts are maintained for each production department.
Given the following data, compute equivalent units of production for conversion costs:
Beginning Work in Process—4,000 units, 40% complete
Units Started into Production—40,000 units
Ending Work in Process—3,000 units, 20% complete.

39,000.
41,600.
42,200.
43,000.
Raw materials inventory, January 1 $20,000
Raw materials inventory, December 31 10,000
Work in process inventory, January 1 6,000
Work in process inventory, December 31 9,000
Finished goods inventory, January 1 16,000
Finished goods inventory, December 31 20,000
Raw materials purchases 400,000
Direct labor 200,000
Factory utilities 75,000

Indirect labor 45,000
Factory depreciation 180,000
Selling & administrative expenses 210,000
Direct materials used is:
$430,000.
$400,000.
$410,000.
$390,000.

Assume direct materials is $400,000. Total manufacturing costs equal:
$780,000.
$900,000.
$600,000.
$700,000.

Assume manufacturing costs is $850,000. Cost of goods manufactured equals:
$850,000.
$847,000.
$853,000.
$854,000.

Assume goods manufactured is $870,000. The cost of goods sold is:
$874,000.

CASH PROVIDED BY OPERATING ACTIVITIES:

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