Question

sk Question 1.34 The order of presentation of activites on the statement of cash ow o aperting Inanding and investing Question 1.35 Onthe statemontor cash nows prepared by the nonct method, a$50,000 pin onthe ผǐeofinvestments would be. O added to net income in converting tfhe net income reported on the incoestiement to cash Nows from operaing adivities O deducled Iom dividends declsred in converting the dividends declared to the cash ws from fnanding acdivities related to divicdernds t Question 1.36 Coste that remain constant in total dollar amount as the level of activity changee are called o mand cents product costs Question 1.37 wnich or the tolowing ie most assoclated with financial accounting? O prepared in accordance with GAAP o can have both abjectlive and subjectve infarmmation o can be preparnd for the entity or segment k Question 1.38 Which of the tollowing ls moet associtated with manageriss accounting? O musl Iolow GAAP

Answer 1

Question1.34: Option C -The order of presentation of statement of cash flow is Operating Activities (relate to the firm's current assets and current liabilities), Investing Activities ( related to firm's non current assets) and Financing Activities ( related to firm's non current liabilities and equity). The change in cash is result of firm's operating, investing and financing activities.

Question1.35: Option C- We need to subtract the gain on sale from net income while calculating CFO under indirect method. Similarly, a loss will be added back in net income while calculating CFO.

Question1.36: Option A( Fixed Costs) - Fixed costs are those costs which remain constant in short run. It is the summation of all expenses that do not change as the level of production increases. and decrease where as Variable costs is the summation of all variable expenses.

Question1.37: Option A - Financial Accounting is the process of preparing financial statements prepared by companies to represent their financial positions and performances to the outsiders(investors, suppliers etc.). There are two accounting standard board - FASB(Financial accounting standard board) and IASB (International accounting standard board). In US, the FASB sets the Generally Accepted Accounting Principles (GAAP) and outside US, IASB sets International financial reporting standard( IFRS )

Option1.38: Option D - Managerial accounting relates to preparing reports and forecasts for managers inside the company. They may rely on estimates and forecasts while preparing the reports.