题目内容

Selected financial data from Flag, Inc 抯 financial statements for the years ended December
31, 2000 and 2001 are as follows (in $ millions):
2000 2001
Cash 20 25
Marketable Securities 30 35
Receivables 50 60
Inventory 100 80
Property, Plant & Equipment (net) 150 150
Accounts Payable 50 40
Long-term Debt 75 100
Selected financial data from Flag, Inc 抯 financial statements for the years ended December
31, 2000 and 2001 are as follows (in $ millions):

A. Cash Ratio 2000-Below average; Cash Ratio 2001-Below average.
B. Cash Ratio 2000-Above average; Cash Ratio 2001-Below average.
Cash Ratio 2000-Below average; Cash Ratio 2001-Above average.
D. Cash Ratio 2000-Above average; Cash Ratio 2001-Above average.

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Under the U.S. FASB conceptual framework, audited financial statements must do all of the following EXCEPT:

A. be relevant.
B. be reliable.
C. consider the economic impact of the reported information.
D. be useful.

Which of the following statements are TRUE?

A. Neither of these are correct.
B. With the installment sales method sales are recognized when cash is received but profits are only recognized after all costs have been recovered.
C. Both of these are correct.
D. With the cost recovery method sales and profits are recognized as cash is received.

Which of the following entities can most likely claim its compliance with GIPS?

A local subsidiary corporation that provides investment management business.
B. A transnational investment consulting services company.
C. An independence investment research firm.

White Corp.抯 financial statements for the year ended December 31, 2001 included the
following:
Income Statement
Sales $8,000,000
Cost of Goods Sold (3,800,000)
Gross Profit 4,200,000
Wages (1,000,000)
Depreciation (600,000)
Interest (500,000)
Taxes (600,000)
Net Income $1,500,000
Selected Balance Sheet Accounts
Dec. 31, 2000 Dec. 31, 2001
Accounts Receivable $1,200,000 $1,500,000
Inventory 800,000 1,000,000
Accounts Payable 600,000 400,000
Equipment 5,300,000 5,500,000
White prepares its Statement of Cash Flow using the direct method.
The Cash Flow from Operations (CFO) section of the statement will show Cash Collections of:

A. $7,700,000.
B. $7,100,000.
C. $6,900,000.
D. $6,700,000.

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