Reference no: EM132953440

Problem 1: In the retail industry, when customers pay cash at the time of sale, revenue is recognized

A) when the inventory is purchased.
B) at the time of sale.
C) when the time frame for returns has passed.
D) when the cash is deposited in the bank.

Problem 2: Which of the following is not usually a necessary condition before a selling company can recognize revenue?

A) Warranty obligations have been estimated.
B) Cost of goods sold has been determined.
C) Risk of ownership of the goods has been transferred.
D) Cash has been received.

Problem 3: A Company has net income of $250,000 during 2020. All sales were cash sales and revenues were $1,000,000. Expenses (on an accrual basis) were $750,000. There were no liabilities at the beginning of the year, but accounts payable at the end of the year were $20,000. Depreciation expense for the year was $50,000. The company's cash from operations on its 2020 statement of cash flows was

A) $250,000.
B) $280,000.
C) $300,000.
D) $320,000.

Problem 4: If a company reported net income for the year of $160,000, cash from operating activities of $105,000, cash flows from financing activities of $225,000, and cash used in investing activities of $450,000, what was their change in cash for the year?

A) $120,000 decrease
B) $170,000 decrease
C) $40,000 increase
D) $65,000 decrease