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When preparing the operating activities section of the statement of cash flows using the indirect method, decreases in current operating assets are subtracted from net income.

Clermont Industries reported Net income of $283,000 and average Total assets of $637,000. The Return on total assets is:

Austin Company reported Net sales of $1,200,000 and Accounts Receivable, net of $78,500. The Day’s sales uncollected (rounded to whole days) is:

If a company plans to continue business into the future, closing entries are not required.

The balance sheet is based on the accounting equation.

The gain or loss from retirement of debt is reported under cash flows from operating activities on the statement of cash flows using the indirect method.

The entry to establish a petty cash fund includes:

The accrual basis of accounting:

Refer to the following selected financial information from Storm River, LLC. Compute the company’s days’ sales in inventory 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  

All of the following are asset accounts except: