8. An example of a financing activity is: A. Buying office supplies B. Obtaining

Question

8. An example of a financing activity is: A. Buying office supplies B. Obtaining a long-term loan C. Buying office equipment D. Selling inventory E. Buying land 9. An example of an operating activity is: A. Paying wages B. Purchasing office equipment C. Borrowing money from a bank D. Selling stock E. Paying off a loan 10. Net Income: A. Decreases equity B. Represents the amount of assets owners put into a business C. Equals assets minus liabilities D. Is the excess of revenues over expenses E. Represents owners' claims against assets 11. If equity is S300,000 and liabilities are $192,000, then assets equal: A. $108,000 B. $192,000 C. $300,000 D. S492,000 E. $792,000

Explanation / Answer

8) Financing activities involve long-term liabilities, stockholders' equity (or owner's equity).

So correct answer is B) Obtaining a long-term loan.

9) Cash flow from operating activities (CFO) is an accounting item that indicates the amount of money a company brings in from ongoing, regular business activities, such as manufacturing and selling goods or providing a service.

So correct answer is D) Selling stock

10. Net Income means excess of revenue minus expenses

So correct answer is D) In the excess of revenue over expenses.

11. Assets= Equity- liabilities= 300000-192000= 108000

So correct answer is A) $108000

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