The statement of cash flows ________.
A) reports all of the cash a company has received and all of the cash a company has disbursed during an accounting period
B) reports all of the income, expenses, and profit or losses a company has earned or incurred during an accounting period
C) reports the amount of assets, liabilities, and shareholders' equity of a business
D) reports all of the income, dividends, and retained earnings of a business
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Q. 2) Benefits of allowing customers to use credit cards for purchases include the potential increase in the number of customers and elimination of the risks associated with sales on account.
Indicate whether the statement is true or false
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Q. 3) To maintain public confidence and trust in the financial reporting of companies is the purpose of
a. the FASB
b. the IRS
c. SarbanesOxley
d. GAAP
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Q. 4) A common approach to keeping a record of each customer's account receivable is to use a subsidiary accounts receivable ledger.
a. True
b. False
Indicate whether the statement is true or false
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Q. 5) Match each of the following items with the appropriate definition below.
a. zero-interest bonds
b. bond discount
c. bond premium
d. financial leverage
e. callable bonds
f. debt-to-equity ratio
g. bond interest payment
h. carrying value
i. convertible bonds
1. occurs when a bond is sold for more than the face value of the bond
2. occurs when a bond is sold for less than the face value of the bond
3. the value of a bond, minus its unamortized discount or plus its unamortized premium
4. the face value of a bond times the stated interest rate of the bond
5. a bond that pays no interest during its life
6. bonds that have a feature that allows the issuing company to buy back the bonds before maturity
7. bonds that can be converted into common stock at the option of the investor
8. the concept of using borrowed funds to increase earnings
9. a ratio that compares the value of the creditors' claims with the value of the owners' claims
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Q. 6) Minks Stink, Inc collected 12,000 in November 2012 from customers in exchange for a 12-month subscription (starting in November) to its monthly magazine Minks Stink.
The company should report 12,000 of revenue on its income statement for the year ended December 31, 2012.
Indicate whether the statement is true or false
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