Question 1. External users want answers to all of the following questions except:

• Is the company earning satisfactory income?
• Will the company be able to pay its debts as they come due?
• Did the company use a budget to plan its expenses?
• How does the company compare in profitability with competitors?

Question 2. Debt securities sold to investors that must be repaid at a particular date some years in the future are called:

• accounts payable.
• notes receivable.
• taxes payable.
• bonds payable.

Question 3. Which activities involve putting the resources of the business into action to generate a profit?

• Delivering
• Financing
• Investing
• Operating

Question 4. The cost of assets consumed or services used is also known as:

• a revenue.
• an expense.
• a liability.
• an asset.

Question 5. Finley Company recorded the following cash transactions for the year:

Paid $90,000 for salaries.
Paid $40,000 to purchase office equipment.
Paid $10,000 for utilities.
Paid $4,000 in dividends.
Collected $150,000 from customers.

What was Finley's net cash provided by operating activities?

• $50,000
• $10,000
• $60,000
• $46,000