All of the following are attributes of depreciation except
Answer(s): B
Depreciation is a non-cash expense. It shows up as an increase to cash on the statement of cash flows.
The balance sheet
Answer(s): D
The balance sheet reports the categories and amounts of assets, liabilities, and stockholders' equity at specific points in time.
How should holdings of equity securities of less than a 20% interest generally be classified on a firm's balance sheet?
Answer(s): A
So long as it is management intent, these securities should be classified as either trading or availablefor-sale securities. The equity method is used to account for an equity interest where management has an ability to exert significant influence over an investee's business activities.
Which of the following is/ are true?
An increase in inventories implies cash was spent to obtain more goods than were sold. An increase in receivables implies part of the sales were made on credit, not a cash basis. Both of these have a negative impact on cash flows. Deferring taxes implies some of the cash expense was delayed into the future, increasing the current cash balance. Utilization of tax loss carry-forwards implies a reduction in the taxable income by the amount of the carry-forward. This reduces cash expense on taxes.
Firms report payments for capital leases in the cash flow statement
Interest expense is classified as CFO and amortization of the lease obligation is reported as cash from financing activities.
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