Study Guide

Finance Mid-Term

1. | Question : | (TCO A, B, C) External users want answers to all of the following questions except |

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  | Student Answer: | |  Is the company earning satisfactory income? |

  | | |  Will the company be able to pay its debts as they come due? |

  | | |  Did the company use a budget to plan its expenses? |

  | | |  How does the company compare in profitability with competitors? |

  | Instructor Explanation: | chapter 1 page 7 |

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  | Points Received: | 3 of 3 |

  | Comments: | |

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 2. | Question : | (TCO C) Issuing shares of stock in exchange for cash is an example of a(n) |

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  | Student Answer: | |  delivering activity. |

  | | |  investing activity. |

  | | |  financing activity. |

  | | |  operating activity. |

  | Instructor Explanation: | chapter 1 page 15 |

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  | Points Received: | 3 of 3 |

  | Comments: | |

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 3. | Question : | (TCO C) Which activities involve putting the resources of the business into action to generate a profit? |

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  | Student Answer: | |  Delivering |

  | | |  Financing |

  | | |  Investing |

  | | |  Operating |

  | Instructor Explanation: | chapter 1 page 15 |

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  | Points Received: | 0 of 3 |

  | Comments: | |

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 4. | Question : | (TCO A) The cost of assets consumed or services used is also known as |

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  | Student Answer: | |  a revenue. |

  | | |  an expense. |

  | | |  a liability. |

  | | |  an asset. |

  | Instructor Explanation: | chapter 1 page 11 |

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  | Points Received: | 3 of 3 |

  | Comments: | |

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 5. | Question : | (TCO C) Edwards Company recorded the following cash transactions for the year:

Paid $45,000 for salaries.

Paid $20,000 to purchase office equipment.

Paid $5,000 for utilities.

Paid $2,000 in dividends.

Collected $75,000 from customers.

What was Edwards' net cash provided by operating activities? |

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