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Exam 1: Introduction to Business Activities and Overview of Financial Statements and the Reporting Process

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Question 31

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The statement of cash flows for Lights-On, a leading electric utility for the year ended December 31, 20x2, showed a net cash inflow from operations of $427,000 million and a net cash outflow for financing of $21,800 million.The comparative balance sheets showed a balance in cash of $32,700 at December 31, 20x1, and $101,200 at December 31, 20x2.Compute the net amount of cash provided or used by Lights-On's investing activities for 20x2.

A) $68,500 million provided
B) $271,300 million used
C) $372,500 million provided
D) $336,700 million used
E) $236,700 million used

F) A) and E)
G) A) and D)

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Question 32

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Describe some of the factors that would affect a firm's goals and strategies.

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1.Goals and strategies of competitors.
2...

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Question 33

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_____ must be used by U.S.Securities and Exchange Commission (SEC) registrants.

The _____ is the private-sector financial accounting standard setter in the U.S., but has no enforcement powers.

Which of the following is/are true regarding the financing of a charitable organization?

Concerns over the quality of financial reporting have led, and continue to lead, to government initiatives in the United States including, the Sarbanes-Oxley Act of 2002. Briefly describe the Sarbanes-Oxley Act of 2002.

Firms communicate the results of their business activities in the annual report to shareholders.

A _____ connects two successive balance sheets because it explains the change in cash from operating, financing, and investing activities.

_____ reports information about cash generated from (or used by) operating, investing, and financing activities during specified time periods.

The balance sheet of Parler, a European Union communications firm, shows current assets of €21,000 million, current liabilities of €16,849 million, shareholders' equity of €17,654 million, and noncurrent assets of €30,402 million.What is the amount of noncurrent liabilities on Parler's balance sheet?

Discuss internal and external users of accounting information. What areas of accounting provide them with information? Give an example of the type of report each type of user might use.

Compute the missing amount affecting retained earnings for Year 2 in each of the five independent cases that follow.Amounts shown are in millions. $\begin{array}{llllllr}&\text { CASE A } & \text { CASE B } & \text { CASE C } & \text { CASE D } & \text { CASE E }\\\text { Retained earnings, Dec. 31, } \text { Year 1 } & \$ 95 & \text { B } & \$ 75 & \$ 87 & \$ 175 \\\text { Net income } & 30 & \$ 450 & 45 & \mathbf{D} & (50) \\\text { Dividends declared and paid } & 10 & 120 & \mathbf{C} & 35 & \text { E } \\\text { Retained earnings, Dec. 31, } \text { Year 2 } & \mathbf{A} & 670 & 60 & 105 & 75\end{array}$

To reduce the lag on collection of accounts receivable, a company might

Which of the following is not a business activity?

_____ represent amounts owed by customers for goods and services they have already received. The customer, therefore, has the benefit of the goods and services before it pays cash.

To carry out their plans, firms require financing, that is, funds from owners and creditors.Owners provide funds to a firm and in return receive ownership interests.For a corporation, the ownership interests are:

Accountants classify various items on the balance sheet or the income statement in one of the following ways: Using the abbreviations above, indicate the classification of each of the following items:

To increase the margin between selling price and manufacturing cost, a manufacturing company might:

The managers of a business prepare financial statements to present meaningful information about that business's activities to external users.

Compute the missing amounts affecting the net income for Year 1 in each of the five independent cases that follow.Amounts shown are in thousands. $\begin{array}{llllll}&\text { CASE A }& \text { CASE B }& \text { CASE C }& \text { CASE D }& \text { CASE E}\\\text { Sales revenue } & \$ 650 & \text { B } & \$ 400 & \$ 800 & \$ 390 \\\text { Cost of goods sold } & 300 & \$ 110 & \text { C } & 400 & 200 \\\text { Selling and } & 150 & 150 & 120 & 65 & \text { E } \\\text { administrative expenses } & & & & &\\\text { Income tax expense } & 56 & 30 & 55 & \text { D } & 0 \\\text { Net income } & \text { A } & 10 & 75 & 235 & (15)\\\end{array}$