FIN 461 LATEST COMPREHENSIVE QUESTIONS AND
ANSWERS SURE A+
✔✔In which section of the income statement should this item be classified?
Interest Expense
a. Net sales.
b. Operating expenses.
c. Other revenue/expense.
d. Special items. - ✔✔c
✔✔In which section of the income statement should this item be classified?
Interest Income
a. Net sales.
b. Operating expenses.
c. Other revenue/expense.
d. Special items. - ✔✔c
✔✔In which section of the income statement should this item be classified?
Sales Returns
a. Net sales.
b. Operating expenses.
c. Other revenue/expense.
d. Special items. - ✔✔a
✔✔In which section of the income statement should this item be classified?
Extraordinary Gain
, a. Net sales.
b. Operating expenses.
c. Other revenue/expense.
d. Special items. - ✔✔d
✔✔In which section of the income statement should this item be classified?
Depreciation Expense
a. Net sales.
b. Operating expenses.
c. Other revenue/expense.
d. Special items. - ✔✔b
✔✔In which section of the income statement should this item be classified?
Research & Development
a. Net sales.
b. Operating expenses.
c. Other revenue/expense.
d. Special items. - ✔✔b
✔✔(T/F) It is possible for a company to post a healthy net income but still not have the
cash needed to pay its employees, suppliers, and creditors. - ✔✔T
✔✔(T/F) The statement of cash flows shows the changes in the income statement
accounts between periods. - ✔✔F
✔✔(T/F) The four parts of a cash flow statement are cash, operating activities, profit
activities, and financing activities. - ✔✔F
✔✔(T/F) Payments for purchases of inventory, operating expenses, and interest are all
classified as operating activities on the statement of cash flows. - ✔✔T
✔✔(T/F) Proceeds from borrowing and issuing the firm's own equity securities are
examples of financing cash inflows. - ✔✔T
✔✔(T/F) Cash from sales of property, plant and equipment and cash collections from
loans to others are examples of investing cash flows. - ✔✔T
ANSWERS SURE A+
✔✔In which section of the income statement should this item be classified?
Interest Expense
a. Net sales.
b. Operating expenses.
c. Other revenue/expense.
d. Special items. - ✔✔c
✔✔In which section of the income statement should this item be classified?
Interest Income
a. Net sales.
b. Operating expenses.
c. Other revenue/expense.
d. Special items. - ✔✔c
✔✔In which section of the income statement should this item be classified?
Sales Returns
a. Net sales.
b. Operating expenses.
c. Other revenue/expense.
d. Special items. - ✔✔a
✔✔In which section of the income statement should this item be classified?
Extraordinary Gain
, a. Net sales.
b. Operating expenses.
c. Other revenue/expense.
d. Special items. - ✔✔d
✔✔In which section of the income statement should this item be classified?
Depreciation Expense
a. Net sales.
b. Operating expenses.
c. Other revenue/expense.
d. Special items. - ✔✔b
✔✔In which section of the income statement should this item be classified?
Research & Development
a. Net sales.
b. Operating expenses.
c. Other revenue/expense.
d. Special items. - ✔✔b
✔✔(T/F) It is possible for a company to post a healthy net income but still not have the
cash needed to pay its employees, suppliers, and creditors. - ✔✔T
✔✔(T/F) The statement of cash flows shows the changes in the income statement
accounts between periods. - ✔✔F
✔✔(T/F) The four parts of a cash flow statement are cash, operating activities, profit
activities, and financing activities. - ✔✔F
✔✔(T/F) Payments for purchases of inventory, operating expenses, and interest are all
classified as operating activities on the statement of cash flows. - ✔✔T
✔✔(T/F) Proceeds from borrowing and issuing the firm's own equity securities are
examples of financing cash inflows. - ✔✔T
✔✔(T/F) Cash from sales of property, plant and equipment and cash collections from
loans to others are examples of investing cash flows. - ✔✔T
