Alex Company Prepares Its Statement of Cash Flows Using the Direct

question 104

Multiple Choice

Alex Company prepares its statement of cash flows using the direct method for operating activities.For the year ended December 31, 2011, Alex Company reports the following activity:

What is the amount of cash collections from customers reported by Alex Company for the year ended December 31, 2011?

• A)$2,040,000
• B)$1,910,000
• C)$2,650,000
• D)$1,430,000

Understand and identify the three basic forms of business organizations.

Grasp the accounting equation and its term definitions.

Comprehend the relationship between revenues, expenses, and net income.

Explain the role of accounting in the modern information age.

---

Definitions:

Ordinary annuity

A series of equal payments made at the end of consecutive periods over a specified length of time.

Deferred annuity

An insurance product that provides future payments to the holder, typically starting at retirement, in exchange for current premiums or a lump sum payment.

Ordinary annuity

A regular annuity involves uniform payments disbursed at the end of each period within a set timeframe.

Compounded annually

This term describes the process of calculating interest on both the initial principal and the accumulated interest from previous periods, done once every year.