FIN621 VU Midterm Papers Spring May 2012

QUESTION:
What is the difference between expense and expenditure? (3)

Question:
What is the principle advantage of using direct method of cash flow statement? (3)

Question:
Why should company prefer to use LIFO instead of FIFO?

QUESTION:
Complete the table :
sales Beginning inventory Net purchases Ending inventory Cost of good sold Gross profit Operating expenses Net income
300,000 95,000 130,000 44000 ? 119,000 90000 ?
600,000 90,000 340,000 ? 330,000 ? ? 25000

Question:
Classify the following activities as cash flow from operating, investing and financing activities

1.proceed from issuing shares
2.interest received on loans
3.repayment of debt principal,capital lease
4.loans made and acquired of other firm’s debt
5.divinded received from scurities

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