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Multiple choice - 10 Sep, 2012

1. In comparing the direct method with the indirect method of preparing the statement of cash flows:

 

a. only operating activities are presented differently

b. only investing activities are presented differently

c. only financing activities are presented differently

d. all activities are presented differently

 

2. The FASB's stated preference for reporting operating cash flows is the:

 

a. indirect method

b. direct method

c. working capital method

d. all financial resources method

 

3. Tropical Tours reported revenue of $400,000 for its year ended December 31, 2011. Accounts receivable at December 31, 2010 and 2011, were $35,000 and $32,000, respectively, Using direct method for reporting cash flows from operating activities, Tropical Tours would report cash collected from customers of:

 

a. $400,000

b. $397,000

c. $403,000

d. $365,000

 

4. An item must meet the subjective criteria of being either unusual or infrequent to be reported as extraordinary.

 

a. true

b. false

 

5. The difference between single-step and multi-step income statements is primarily an issue of:

 

a. consistency

b. presentation

c. measurement

d. valuation



Category : Financial Accounting

Search Keywords :
Direct , Indirect , FASB , Tropical , Tours , Unusual , Infrequent , Single-step , Multi-step 


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Answer  - 10 Sep, 2012
1. The difference in the presentation under the direct method and the indir....


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