Question

Help please!!

1. reconciling item (R) in the statement of cash flows in any

a. reduction in income

b. increase in income

c. item that does not affect operating cash flow

d. amount causing income to change by an amount different from its effect on total cash

e. amount causing income to change by an amount different from its effect on operating cash

2. what is the reason for the 90 day (3 month) maximum maturity rule used in the definition of cash equivalents (CE)?

a. to reduce the risk of default

b. firms do not hold cash very long; therefore CEs also should not be held for a long period of time

c. to ensure that stock investments do not qualify as CEs

d. to Minimize the effect of interest rate changes on the value of CEs

e. to avoid including noncurrent items in the definition of CE

3. Which of the following would not be reported in any SCF, regardless of format?

a. income tax refund

b. wages expense

c. change in wage payable

d. wage payments

e. payments for capitalized interest

4.a firm sponsors a defined contribution pension plan. The total contractual contribution required by the firm (employer) for the current year is $80,000 but due to the timing of the payrolls at the beginning and end of the year, the firm contributed only $75,000 for the year. Determine the direct method SCF (including reconciliation) line items.

a. O: (75,000); R: 5,000

b. O: (85,000); R: 5,000

c. O: (75,000); R: (5,000)

D. O: (85,000); R: (5,000)

e. R: 5,000

5. during the current year, the bonds payable account did not change (beginning and ending balances are equal), but the bond discount account decreased $300. Determine the direct method SCF (including reconciliation) line item.

a. R: (300)

b. O: 300

c. R: 300

d. O: (300)

e. F: 300

Answer 1