capital stock.

retained earnings.

dividends.

Question 16

Which of the following would be added back to net income in the operating activities section of the statement of

cash flows?

Payment of a cash dividend.

Increase in inventory.

Increase in accounts payable.

Gain on sale of equipment.

Question 17

Which of the following is a limitation of the balance sheet?

Many items that are of financial value are omitted.

Judgments and estimates are used.

Current fair values are not reported for many assets and liabilities.

All of these

Question 18

Which of the following is not a major disclosure technique for the balance sheet?

Notes.

Parenthetical explanations.

Supporting schedules.

Worksheets.

Question 19

Which of the following balance sheet formats lists the assets on the left side of the page and the liabilities and

stockholders’ equity on the right side?

Single step form.

Account form.

Multiple step form.

Report form.

Question 20

The financial statement which summarizes the operating, investing, and financing activities of an entity for a period of

time is the

retained earnings statement.

income statement.

statement of cash flows.

statement of financial position

Question 21

The issuance of stock and the payment of dividends are

operating activities.

investing activities.

stock activities.

financing activities.

Question 22

Cortex Corporation reports:

What is Cortez’s ending cash balance?

$720,000.

$890,000.

$1,530,000.

$1,750,000.

Question 23

Which of the following is not a type of information that is supplemental to amounts presented in the balance sheet?

Accounting policies.

Balance sheet format.

Contingencies.

Contractual situations.

Question 24

The cash debt coverage ratio is computed by dividing net cash provided by operating activities by average

current liabilities.

total assets.

total liabilities.

total long-term liabilities.

Question 25

How many different ways may pertinent information be disclosed in the financial statements?

4

3

2