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On a balance sheet what is the preferable presentation of notes or accounts receivable

On a balance sheet, what is the preferable presentation of notes or accounts receivable from officers, employees, or affiliated companies?

a.As trade notes and accounts receivable if they otherwise qualify as current assets

b.As assets but separately from other receivables

c.As offsets to capital

d.By means of notes or footnotes

2.The basis for classifying assets as current or noncurrent is the period of time normally elapsed from the time the accounting entity expends cash to the time it converts

a.Inventory back  to cash or 12 months, whichever is shorter

b.Receivable s back into cash or 12 months, whichever is longer

c.Tangible fixed assets back into cash or 12 months, whichever is longer

d.Inventory back to cash or 12 month, whichever is longer

3.The valuation basis used in conventional financial statements is

a.Replacement cost

b.Market value

c.Original cost

d.A mixture of costs and values

4.A transaction that would appear as an application of funds  on a conventional funds statement using the all-financial-resources concept, but not on a statement using the traditional working capital concept would be the

a.Acquisition of property, plant, and equipment for cash

b.Reacquisition of bonds issued by the reporting entity

c.Acquisition of property, plant, and equipment with an issue of common stock

d.Declaration and payment of dividends

5.There would probably be a major difference between a statement of source and application of working capital and a cash flow statement in the treatment of

a.Dividends declared and paid

b.Sales of noninventory assets for cash at a loss

c.Payment of long-term debt

d.A change during the period in the accounts payable balance

6.A basic objective of the statement of cash flows is to

a.Supplant the income statement and balance sheet

b.Disclose changes during the period in all asset and all liability accounts

c.Disclose the change in working capital during the period

d.Provide essential information for financial statements users in making economic decisions

7.A statement of cash flows should be issued by a profit-oriented business

a.As an alternative to the statement of income and retained earnings

b.Only if the business classifies its assets and liabilities as current and noncurrent

c.Only when two-year comparative balance sheets are not issued

d.Whenever a balance sheet and a statement of income and retained earnings are issued

8.When preparing a statement of changes in financial position using the cash basis for defining funds, an increase in ending inventory over beginning inventory will result in an adjustment to reported net earnings because

a.Funds were increased since inventory is a current asset

b.The net increase in inventory reduced cost of goods sold but represents an assumed use of cash

c.Inventory is an expense deducted in computing net earnings, but is not a use of funds

d.All changes in noncash accounts must be disclosed under the all financial resources concept

9.Which of the following should theoretically be presented in a statement of changes in financial position only because of the all-financial-resources concept?

a.Conversion of preferred stock to common stock

b.Purchase of treasury stock

c.Sale of common stock

d.Declaration of cash dividend

10.When preparing a funds statement using the all financial resources concept, the retirement of long-term debt by the issuance of common stock should be presented in a statement of changes in financial position as a

a.NoNo

b.No       Yes

c.Yes        No

d.YesYes

Jan 10 2020 View more View Less

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