FAL 06 Connecting Statements and Levels of Assurance Certification Exam Questions With Guaranteed Answers.
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Course
FAL.
Institution
FAL.
Net income after tax belongs to? (Retained earnings OR Contributed Capital) - correct answer Retained earnings
Dividends distributed to shareholders (Retained earnings OR Contributed Capital) - correct answer Retained earn...
FAL 06 Connecting Statements and
Levels of Assurance
Net income after tax belongs to? (Retained earnings OR Contributed Capital) - correct answer
Retained earnings
Dividends distributed to shareholders (Retained earnings OR Contributed Capital) - correct answer
Retained earnings
New investments by shareholders (Retained earnings OR Contributed Capital) - correct answer
Contributed Capital
Repurchase of Shares (Retained earnings OR Contributed Capital) - correct answer
Contributed Capital
Sources of Cash characteristics - correct answer Collection of accounts receivable
Sale of inventory
Advance on line of credit
Increase in accounts payable
Use of cash characteristics - correct answer Purchase of inventory
Purchase of new equipment
Payment on term loan
Buy-back of stock from shreholder
The three categories in the Statement of cash flows - correct answer 1. Operating
Activities
2. Investing Activities
3. Financing Activities
, Operating Activities includes: - correct answer Derived from the principle revenue-
producing activities of the business.
Cash receipts from the sale of goods and the rendering of services
Cash receipts from royalties, fees, commissions, and other revenue
Cash payments to suppliers for goods and services
Cash payments to employees
Examples:
Other income
Depreciation expenses
Increase in the balance in accounts payable
Investing activities include: - correct answer Represents the extent to which
expenditures have been made for resources intended to generate future income and cash flows.
Cash payments to acquire fixed assets
Cash proceeds from sale of fixed assets
Cash payments to acquire or invest in other enterprises or joint ventures
If cash flow used in investing activities is greater than the amount of cash flow generated from operating
activities, the business is likely to have to borrow or use its cash reserves to support the investing
activities.
Examples:
Proceeds from the sale of equipment used in the business
Purchase of a subsidiary
Purchase of fixed assets
Financing activities include: - correct answer Shows how excess cash flow was used
to pay down borrowings or how cash flow shortfalls were funded.
Cash proceeds from notes payable and term loans
Cash repayments of amounts borrowed.
Cash received from issuance of share capital.
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