QUESTION: 1477

Which of the following would be classified a cash inflow from investing activities?

Cash paid to retire bonds
Proceeds from issuing stock
Cash paid for dividends
Proceeds from selling investments in the equity securities of other companies

Answer(s): D

Explanation:

All other responses qualify as cash flows from financing activities.

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QUESTION: 1478

Which of the following would be classified a cash inflow from investing activities?

proceeds from selling investments in the debt securities of other entities, except cash equivalents
all responses are correct
proceeds from collecting the principal amount of loans
proceeds from selling investments in the equity securities of other companies

Answer(s): B

Explanation:

All responses qualify as cash inflows from investing activities.

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QUESTION: 1479

Under the treasury stock method, primary earnings per share data are computed as if options and warrants (outstanding for the entire year) were exercised at the

none of these answers.
beginning of the period and as if the funds obtained thereby were used to purchase common stock at the current market price in effect at the end of the period.
end of the period and as if the funds obtained thereby were used to purchase common stock at the current market price in effect at the end of the period.
end of the period and as if the funds obtained thereby were used to purchase common stock at the average market price during the period.
beginning of the period and as if the funds obtained thereby were used to purchase common stock at the average market price during the period.

Answer(s): E

Explanation:

The treasury stock method assumes the exercise of outstanding options and warrants at the beginning of the period or at time of issuance, if later. It also assumes that the proceeds from the exercise were used to purchase common stock at the average market price during the period.

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QUESTION: 1480

Retained earnings represent:

none of these answers.
undistributed net income in the last accounting period.
accumulated, undistributed earnings since inception.
earnings inclusive of any paid-in capital since inception.

Answer(s): C

Explanation:

Any undistributed net income during a period is swept into the "retained earnings" account. Thus, retained earnings at any point represent the cumulative undistributed earnings since the company was formed. This account is the chief source of distribution of dividends and other payments to shareholders.

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QUESTION: 1477

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QUESTION: 1478

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QUESTION: 1479

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QUESTION: 1480

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