Social Science Questions
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17) Which of the following adjustments net income is NOT correct if you want to calculate cash flow from operating activities?A) Add back depreciationB) Add increases in accounts payableC) Add increases in accounts receivableD) Deduct increases in inventory
11) Which of the following is NOT a use of cash from financing activities?A) Repayment of long-term debtB) Proceeds from issuance of common stockC) Proceeds for long-term borrowingD) Both B and C
18) Which statement is NOT correct about cash flow statements?A) They examine the cash inflows and cash outflows generated by operating activities, investing activities, and financing activities.B) They examine the cash inflows and cash outflows generated by operating activities, budgeting activities, and financing activities.C) They reconcile any changes in cash balances between two periods.D) They reflect the firm's ongoing investment in fixed assets.
27) An income statement reports a firm's profit relative to its total investment in plant and equipment.
10) Which of the following is NOT a source of cash from financing activities?A) Repayment of long-term debtB) Proceeds from issuance of common stockC) Proceeds for long-term borrowingD) Both A and C
8) Which of the following is NOT a use of cash from investing activities?A) Proceeds from the sale of a businessB) Investment in fixed assetsC) Payment of dividendsD) Both A and C
9) Which of the following is NOT a use of cash from investing activities?A) Proceeds from the sale of a businessB) Investment in fixed assetsC) Payment for business acquiredD) Investment in land
29) Corporate income statements are usually compiled on an accrual, rather than cash, basis.
3) Which of the following is NOT included in the calculation of free cash flows?A) Operating incomeB) Interest expenseC) DepreciationD) Net operating working capital
28) On an accrual basis income statement, revenues and expenses always match the firm's cash flow.
4) Free cash flow will increase with a decrease in: A) tax rate.B) depreciation expense.C) accruals.D) Both A and C.
2011 2012Dividends paid$400$700Accounts payable300500Long-term debt2,3002,000Common stock2,2003,000Retained earnings6,1506,35023) Based on the selected financial information for Coffeeberry Coffeehouse, calculate net income for 2012.A) $100B) $900C) $500D) $300
1) Which of the following items is included in the calculation of net operating working capital which determines free cash flow?A) Accounts payableB) Dividend paymentsC) Fixed assetsD) Interest expense
6) The change between a firm's beginning cash balance and ending cash balance would equal A) cash flow from operations + cash flow from investing activities + cash flow from financing activities.B) the change in current assets minus the change in current liabilities.C) net income plus new borrowing minus asset purchases.D) total assets minus total liabilities minus total stockholders' equity.
30) Dividends paid to a firm's stockholders, both preferred and common stockholders, are taxdeductible to the paying company.
26) The income statement represents a snapshot of account balances at one point in time.
17) Which of the following would be included in the calculation of net operating working capital?A) Accounts payableB) AccrualsC) Short-term notes payableD) Both A and BE) All of the above
18) The following statements are all true EXCEPT: A) dividends are paid from net income.B) dividends represent a use of cash and do not have to be paid if a firm has a net loss.C) dividends are paid to a firm's stockholders, both preferred and common stockholders, are tax deductible to the paying company.preferred stockholders, who are primarily investors seeking current income, usually receive dividends.
15) A firm reports the following income statement items: sales of $60,550,000; income tax of $1,744,000; operating expenses of $10,115,000; cost of goods sold $34,025,000; and interest expense of $750,000. What is the amount of the firm's EBIT?A) $18,154,000B) $14,935,000C) $16,410,000 D) $7,775,000
27) What is Regency's net working capital in 2012 and 2011?A) $27 million; $12 millionB) $315 million; $276 millionC) $39 million; $27 millionD) None of the above