Question

1)

On May 1st Sarif Industries paid $24,000 to Detroit Realty for 6 months rent beginning June 1st. The company did the correct recording on May 1st. What accounts of Sarif were affected?

A-- Decrease in Cash, 24,000; increase in Pre Paid Rent, 24,000

B-- increase Rent Expense, 24,000; decrease in Cash 24,000

C-- increase Prepaid Rent, 24,000; increase in Rent Expense, 24,000

D-- increase Rent Expense, 24,000; decrease Prepaid Rent, 24,000

2)

Tai Yong Medical provides $45,000 in services on account. What kind of cash flow activity is this?

A-- Operating Activity

B-- Investing Activity

C-- Not Applicable

D-- Financing Activity

3)

The Tai Yong Medical Corporation provided services for $7,500 cash during the 2019 accounting period. Tai Yong incurred $6,000 expenses on account during 2019, and by the end of the year, $3,000 of that amount had been paid with cash. Tai Yong paid dividends of $900 to stockholders during the year. Assume that these are the only accounting events that affected Tai Yong during the 2019 accounting period. What is the cash flow from operations for 2019?

A-- 4,500

B-- 1,500

C-- 3,600

D-- 600

4)

The Blumer Company entered into the following transactions during 2019:

1. The company was started with $22,000 of common stock issued to investors for cash.
2. On July 1, the company purchased land that cost $15,500 cash.
3. There were $700 of supplies purchased on account.
4. Sales on account amounted to $9,500.
5. Cash collections of receivables were $5,500.
6. On October 1, 2019, the company paid $3,600 in advance for a 12-month insurance policy that became effective on October 1.
7. Supplies on hand as of December 31, 2019 amounted to $225.

The amount of cash flow from investing activities would be:

A-- 16,200 Cash Outflow

B-- 15,500 Cash Outflow

C-- 14,800 Cash Inflow

D-- 15,500 Cash Inflow

Answer 1

1. The answer is Option A.

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2. The answer is Option C.

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3. Cash flows from Operating activities = $7,500 cash received for services provided - $3,000 expenses

= $4,500

The answer is Option A.

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4. Cash flow from Investing activities = Cash paid for land

= $15,500

The answer is Option B.