Intermediate Accounting Quiz Chapter 5

1. _B_____ Balance sheet information is useful for all of the following except to

a. compute rates of return

b. analyze cash inflows and outflows for the period

c. evaluate capital structure

d. assess future cash flows

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

a. solvency.

b. financial flexibility.

c. liquidity.

d. exchangeability.

3. __B_____ The correct order to present current assets is

a. cash, accounts receivable, prepaid items, inventories.

b. cash, accounts receivable, inventories, prepaid items.

c. cash, inventories, accounts receivable, prepaid items.

d. cash, inventories, prepaid items, accounts receivable.

4. _B_____ Which item below is not a current liability?

a. Unearned revenue

b. Stock dividends distributable

c. The currently maturing portion of long-term debt

d. Trade accounts payable

5. __D_____ Working capital is

a. capital which has been reinvested in the business.

b. unappropriated retained earnings.

c. cash and receivables less current liabilities.

d. none of these.

Quiz 5 continued over . . .

Quiz 5 continued.

6. __D_____ Which of the following is a contra account?

a. Premium on bonds payable

b. Unearned revenue

c. Patents

d. Accumulated depreciation

7. __D_____ Which of the following events will appear in the cash flows from financing activities section of the statement of cash flows?

a. Cash purchases of equipment.

b. Cash purchases of bonds issued by another company.

c. Cash received as repayment for funds loaned.

d. Cash purchase of treasury stock.

8. __B_____ Houghton Company has the following items: common stock, $720,000; treasury stock, $85,000; deferred taxes, $100,000 and retained earnings,...