ACCT 201 STUDY TEST QUESTIONS
WITH CORRECT ANSWERS
Assume that the E-Zip Corporation uses the indirect method to depict cash flows.
Indicate where, if at all, common stock issued for cash would be classified. - Answer--
Financing activities section
Present value is based on - Answer--The dollar amount to be received
-The length of time until the amount received
-The interest rate
(All of these answers are right)
Treasury stock is - Answer-A corporation's own stock that has been reacquired and held
for future use
Of the items below, the one that appears first on the statement of cash flows is -
Answer--Net increase (decrease) in cash
The acquisition of treasury stock by a corporation - Answer--decreases its total assets
and total stockholders' equity.
If the market rate of interest is lower than the contractual interest rate, the bonds will sell
at - Answer-- A premium
On the statement of cash flows from operating activities section would be effected by -
Answer-- Cash receipts from sales activities
Treasury stock should be reported in the finical statements of a corporation as a -
Answer--deduction from total paid-in capital an retained earnings
In the balance sheet, the amount premium on bonds payable is - Answer--added to
bonds payable
Which of the following is not a right of preference associated with preferred stock -
Answer-- the right to vote
cash flows from operating activities, as reported on the statement of cash flows under
the indirect method, would include - Answer--net income
WITH CORRECT ANSWERS
Assume that the E-Zip Corporation uses the indirect method to depict cash flows.
Indicate where, if at all, common stock issued for cash would be classified. - Answer--
Financing activities section
Present value is based on - Answer--The dollar amount to be received
-The length of time until the amount received
-The interest rate
(All of these answers are right)
Treasury stock is - Answer-A corporation's own stock that has been reacquired and held
for future use
Of the items below, the one that appears first on the statement of cash flows is -
Answer--Net increase (decrease) in cash
The acquisition of treasury stock by a corporation - Answer--decreases its total assets
and total stockholders' equity.
If the market rate of interest is lower than the contractual interest rate, the bonds will sell
at - Answer-- A premium
On the statement of cash flows from operating activities section would be effected by -
Answer-- Cash receipts from sales activities
Treasury stock should be reported in the finical statements of a corporation as a -
Answer--deduction from total paid-in capital an retained earnings
In the balance sheet, the amount premium on bonds payable is - Answer--added to
bonds payable
Which of the following is not a right of preference associated with preferred stock -
Answer-- the right to vote
cash flows from operating activities, as reported on the statement of cash flows under
the indirect method, would include - Answer--net income
