1. An increase in the long-term notes payable is reported on the statement cash flows as

a) Cash from Operations

b) Cash from Investing Activities

c) Cash from Financing Activities

d) An increase in long-term notes payable is not reported on the statement of Cash flows.

2. Which of the following statements about expenses are true under accrual basis of accounting?

a) Expenses represent the resources an organization uses during a period of time.

b) All expenses reflect cash outflows by the organization at the time they are recognized.

c) Expenses cannot be incurred before an organization pays for a resource.

d) Expenses result in a decrease in net assets for a non-profit organization.

3. Which of the following statements about bad debts are true?

a) the amount of money in the allowance for bad debts must be equal to the

current years bad debt expense

b) the amount of money that is written off in a given year must be equal to that

years bad debt expense

c) the amount of money added to the allowance bad debts must be equal to the current years bad debt expense.

4. Which of the following statements about depreciation are correct?

a) depreciation represents the amount of cash that the organization paid out this

year to use its long-lived assets.

b) depreciation expenses perfectly reflect the amount of long-lived assets that

were used by an organization.

c) depreciation represents the allocation of the cost of a capital asset over its life

based on a specific method of accounting (straight line, accelerated etc).

plz help..TT