Question

Q#1: When using the indirect method, how is an increase in accounts receivable during the year shown on the statement of cash flows?

a. Financing activity b. Operating activity c. Noncash investing and financing activity d. Investing activity

Q#2

Suma Corp. reported the following information for 2015 and 2016.
Salaries payable, December 31, 2015 $3,700
Salaries payable, December 31, 2016 1,800
Salaries expense--2016 57,000
How much cash was paid for salaries during 2016?

a. $55,100
b. $58,900
c. $55,200
d. $57,000

Q#3

Trend analysis is analysis:

a. of dollar changes and percentage changes over several years.
b. in which all items are presented as a percentage of one selected item on a financial statement.
c. of all ratios that increased or decreased over past accounting periods.
d. in which a statistic is calculated for the relationship between two items on a single financial statement or for two items on different
financial statements.

Q#4

The cash-to-cash operating cycle is the number of days' sales in:

a. inventory and receivables.
b. receivables and plant assets.
c. inventory and plant assets.
d. receivables and working capital.

Q#5

Which of the following is considered a profitability ratio?

a. Acid-test ratio
b. Debt-to-equity ratio
c. Earnings per share
d. Inventory turnover ratio

Q#6

Which profitability ratio requires the use of earnings per share in its calculation?

a. Return on common stockholders' equity
b. Dividend yield ratio
c. Price/earnings ratio
d. Profit margin

Answer 1

1) Increase in Accounts Receivable is shown under operating activities of indirect method of cashflow statement. It is shown under negative amount for Increase amount.

Option b) is there answer.

2) Cash paid to salaries during 2016 is = Opening salaries payable + Salaries expenses for the year 2016 - Ending salaries payable = 3700+57000-1800= $ 58,900

Option b) is the answer.

3) Treand analysis is a percentage changes over several years.

Option a)

4) Cash to cahs Operating cycle is the number of days sales in inventory and receivables.

Answer is option a)

5) Profitability ratio is earnings per share

Answer is option c)

6) Price earning ratio is one which uses earnings per share in it's caluclated.

Answer is option c)