Question 1. External users want answers to all of the following questions except:
- Is the company earning satisfactory income?
- Will the company be able to pay its debts as they come due?
- Did the company use a budget to plan its expenses?
- How does the company compare in profitability with competitors?
Question 2. Debt securities sold to investors that must be repaid at a particular date some years in the future are called:
- accounts payable.
- notes receivable.
- taxes payable.
- bonds payable.
Question 3. Which activities involve putting the resources of the business into action to generate a profit?
- Delivering
- Financing
- Investing
- Operating
Question 4. The cost of assets consumed or services used is also known as:
- a revenue.
- an expense.
- a liability.
- an asset.
Question 5. Finley Company recorded the following cash transactions for the year:
Paid $90,000 for salaries.
Paid $40,000 to purchase office equipment.
Paid $10,000 for utilities.
Paid $4,000 in dividends.
Collected $150,000 from customers.
What was Finley's net cash provided by operating activities?
- $50,000
- $10,000
- $60,000
- $46,000