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NO.1 The year-end income statement and balance sheet accounts for a company as of December
31, Year 1 are shown in the Exhibit.
If no changes occurred in the current asset and current liability account balances from the beginning
of the period, except for cash, what was the net cash flow from operations for Year 1?
A. $400,000
B. $390,000
C. $350,000
D. $365,000
Answer: A

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NO.2 An art history museum has recently finished renovating its new location. Before the move, the
treasurer considers purchasing additional insurance to protect the art during transit. What form of
additional insurance should the treasurer choose?
A. Special multi-peril (SMP)
B. Business interruption
C. Difference in conditions (DIC)
D. General liability
Answer: C

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