FIN621 Financial Statement Analysis MIDTERM EXAMINATION Fall 2009

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Question No: 10 ( Marks: 1 ) - Please choose one
After the closing entries are posted to the ledger, each expense account will have?
A debit balance
A negative balance
A credit balance
A zero balance
Question No: 11 ( Marks: 1 ) - Please choose one
Current assets are those assets which management intends to convert into cash or consume within:
The operating cycle
One year
The longer o f operating cycle or one year
The shorter of operating cycle o r o ne year
Question No: 12 ( Marks: 1 ) - Please choose one
Which of the following is NOT the most common example of cash equivalents?
Savings deposits
Certificates of Deposit (CDs)
Stocks of other companies
Money market mutual funds
Question No: 13 ( Marks: 1 ) - Please choose one
In preparing the statement of cash flows, how should non-cash investing/financing activities be reported?
In the financing activities section of the statement of cash flows
In a separate schedule accompanying the statement of cash flows
In the investing activities section of the statement o f cash flows
Should not to be reported
Question No: 14 ( Marks: 1 ) - Please choose one
Which of the following items are NOT added back to the net income figure (which is
found on the Income Statement) to arrive at cash flows from operations?
Depreciation
Deferred tax
Amortization
Investments
Question No: 15 ( Marks: 1 ) - Please choose one
Which of the following activities convert the income statement items from the accrual
basis of accounting to cash?
Operating activities
Investing activities
Financing activities
Non cash activities
Question No: 16 ( Marks: 1 ) - Please choose one
Which one o f the following items is specifically included in the body of a statement of cash flows?
Operating and non- operating cash flow information
Conversion of debt to equity
Acquiring an asset through a capital leases
Purchasing a building by giving a mortgage to the seller
Question No: 17 ( Marks: 1 ) - Please choose one
ABC Company has a cost of goods sold of Rs. 500,000. During the year the inventory
increased by Rs. 10, 000 and accounts payable increased by Rs. 15,000. The interest
expense was Rs. 15,000 for the year and dividend of Rs. 11,000 were paid during the
year. What would be the cash payments for the purchase of the merchandise.
Rs. 505,000
Rs. 516,000
Rs. 490,000
Rs. 495,000 Correct