At the beginning of the year, a firm leased equipment on a capital lease, capitalizing $60,000 in its lease receivable account. The contract calls for December 31 payments of $15,000 . The lessor's annual reporting period ends December 31 and the contract reflects 10% interest. The lessee made the first payment as required. The direct method statement of cash flows for the lessor should reflect
which of the following in the first year of the lease contract (ignore noncash disclosures)?
a. $15,000 operating cash flow
b. $6,000 operating cash flow; $9,000 investing cash flow
c. $6,000 operating cash flow; $9,000 addition reconciling adjustment
d. $9,000 investing cash flow
B
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The periodic payments on equity securities are called
A. interest payments. B. dividends. C. equity shares. D. stock repurchases.
Which of the following statements is not true?
a. Assets are available resources for the owner of a sole proprietorship; b. Some steps in the accounting cycle occur during the fiscal period; c. Information in one financial statement may also appear in another financial statement; d. After the closing process is completed, every account has a zero balance; e. Collecting receivables is not part of the accounting cycle
Which of the following is a guideline for granting claims and requests for adjustment when your company is at fault?
A) Do not provide detail for how you plan to resolve the situation. B) Specifically assign blame to someone else in the organization. C) Start from the assumption that the information the customer provided is correct. D) Imply that the customer is at fault. E) Avoid taking or assigning personal responsibility for setting matters straight.
Marshall Company uses a standard cost system. Variable overhead costs are allocated based on direct labor hours. In the first quarter, Marshall had a favorable efficiency variance for variable overhead costs. Which of the following scenarios is a reasonable explanation for this variance?
A) The actual number of direct labor hours was lower than the budgeted hours. B) The actual variable overhead costs were higher than the budgeted costs. C) The actual variable overhead costs were lower than the budgeted costs. D) The actual number of direct labor hours was higher than the budgeted hours.