General-purpose financial statements include the (1) income statement, (2) balance sheet, (3) statement of stockholders’ equity (or statement of retained earnings), (4) statement of cash flows, and (5) notes to these statements.

Which of the following is classified as a current asset?

In preparing a company’s statement of cash flows for the most recent year using the indirect method, the following information is available:           Net income for the year was $ 52,000   Accounts payable increased by   18,000   Accounts receivable decreased by   25,000   Inventories decreased by   5,000   Cash dividends paid were   14,000   Depreciation expense was   20,000   Net cash provided by operating activities was:

Both the direct and indirect methods yield the identical net cash flow amount provided or used by operating activities.

Working capital is computed as current liabilities minus current assets.

Refer to the following selected financial information from Cape Town, LLC. Compute the company’s days’ sales uncollected for Year 2. (Use 365 days a year.)    Year 2   Year 1 Cash $ 37,500   $ 36,850   Short-term investments   90,000     90,000   Accounts receivable, net   85,500     86,250   Merchandise inventory   121,000     117,000   Prepaid expenses   12,100     13,500   Plant assets   388,000     392,000   Accounts payable   113,400     111,750   Net sales   711,000     706,000   Cost of goods sold   390,000     385,500  

Three of the most common tools of financial analysis include horizontal analysis, vertical analysis, and ratio analysis.

In preparing a company’s statement of cash flows for the most recent year using the indirect method, the following information is available:           Net income for the year was $ 52,000   Accounts payable increased by   18,000   Accounts receivable decreased by   25,000   Inventories decreased by   5,000   Cash dividends paid were   14,000   Depreciation expense was   20,000   Net cash provided by operating activities was:

On April 1, a company paid the $1,350 premium on a three-year insurance policy with benefits beginning on that date. What amount of the insurance expense will be reported on the annual income statement for the year ended December 31?

The higher the accounts receivable turnover, the less quickly accounts receivable are collected.