Question 1

Most managers stress the importance of understanding and predicting cash flows for business decisions.

Accepted Answer

A) True 
 B)False

Question 2

Based on the information provided below for Krackle Corp. ,complete the following worksheet to be used to prepare the statement of cash flows using the indirect method.
(a)Net income for the year was $30,000.
(b)Dividends of $10,000 were declared and paid.
(c)Krackle's only noncash expense was depreciation which totaled $50,000.
(d)The company purchased plant assets for $70,000.
(e)Notes payable in the amount of $40,000 were issued during the year for cash.

Accepted Answer

The answer of Based on the information provided below for...

Question 3

Cash paid for merchandise is an operating activity.

Accepted Answer

A) True 
 B)False

Question 4

In preparing a company's statement of cash flows for the most recent year using the indirect method,the following information is available:   Net cash provided by operating activities was:

Accepted Answer

A) $120,000. 
B) $60,000. 
C) $70,000. 
D) $80,000. 
E) $130,000. 
A) $120,000. 
B) $60,000. 
C) $70,000. 
D) $80,000. 
E) $130,000.

Question 5

A company had average total assets of $3,216,000,total cash flows of $1,320,000,cash flows from operations of $554,000,and cash flows for plant assets of $850,000.The cash flow on total assets ratio equals:

Accepted Answer

A) 41.04%. 
B) 41.97%. 
C) 26.43%. 
D) 17.23%. 
E) 64.39%. 
A) 41.04%. 
B) 41.97%. 
C) 26.43%. 
D) 17.23%. 
E) 64.39%.

Question 6

The cash flow on total assets ratio is computed by dividing average total assets by operating income.

Accepted Answer

A) True 
 B)False

Question 7

Business activities that generate or use cash are classified as operating,investing,or financing activities on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 8

The payment of cash dividends never changes the balance of retained earnings.

Accepted Answer

A) True 
 B)False

Question 9

The accountant for Huckleberry Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available:   What is the ending balance for retained earnings?

Accepted Answer

A) $264,000. 
B) $13,000. 
C) $243,000. 
D) $197,000. 
E) $105,000. 
A) $264,000. 
B) $13,000. 
C) $243,000. 
D) $197,000. 
E) $105,000.

Question 10

The accountant for Crusoe Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available:   The amount of cash dividends paid during the year would be:

Accepted Answer

A) $48,000. 
B) $46,000. 
C) $8,000. 
D) $64,000. 
E) $44,000. 
A) $48,000. 
B) $46,000. 
C) $8,000. 
D) $64,000. 
E) $44,000.

Question 11

When preparing a statement of cash flows using the indirect method,each of the following should be classified as an operating cash flow except:

Accepted Answer

A) An increase in accounts receivable. 
B) A decrease in accounts payable. 
C) Proceeds from the disposal of a long-term asset with no gain or loss. 
D) An increase in prepaid expenses. 
E) A decrease in accrued expenses payable. 
A) An increase in accounts receivable. 
B) A decrease in accounts payable. 
C) Proceeds from the disposal of a long-term asset with no gain or loss. 
D) An increase in prepaid expenses. 
E) A decrease in accrued expenses payable.

Question 12

A company's transactions with its creditors to borrow money and/or to repay the principal amounts of both short- and long-term debt are reported as cash flows from:

Accepted Answer

A) Operating activities. 
B) Investing activities. 
C) Financing activities. 
D) Direct activities. 
E) Indirect activities. 
A) Operating activities. 
B) Investing activities. 
C) Financing activities. 
D) Direct activities. 
E) Indirect activities.

Question 13

Based on the information in the following income statement and balance sheet for Monterey Corporation,determine the cash flows from operating activities using the direct method.

Accepted Answer

The answer of Based on the information in the following...

Question 14

Addams Corporation paid cash dividends totaling $75,000 during its most recent fiscal year.How should this information be reported on Addam's statement of cash flows?

Accepted Answer

A) In operating activities as a source of funds. 
B) In investing activities as a source of funds. 
C) In investing activities as a use of funds. 
D) In financing activities as a source of funds. 
E) In financing activities as a use of funds. 
A) In operating activities as a source of funds. 
B) In investing activities as a source of funds. 
C) In investing activities as a use of funds. 
D) In financing activities as a source of funds. 
E) In financing activities as a use of funds.

Question 15

The FASB requires a reconciliation of net income to net cash provided or used by operating activities when the ______________ method is used.

Accepted Answer

The answer of The FASB requires a reconciliation of net...

Question 16

Which of the following is included in the cash flows from financing activities section of the statement of cash flows?

Accepted Answer

A) Interest revenue. 
B) Sale of equipment. 
C) Interest expense. 
D) Purchase of treasury stock. 
E) Purchase of stock in another company. 
A) Interest revenue. 
B) Sale of equipment. 
C) Interest expense. 
D) Purchase of treasury stock. 
E) Purchase of stock in another company.

Question 17

An increase in the accounts receivable account during the year should be reported on the statement of cash flows as:

Accepted Answer

A) An increase in cash flows from operating activities 
B) An increase in cash flows from investing activities 
C) A decrease in cash flows from operating activities 
D) A decrease in cash flows from investing activities 
E) An increase in cash flows from financing activities 
A) An increase in cash flows from operating activities 
B) An increase in cash flows from investing activities 
C) A decrease in cash flows from operating activities 
D) A decrease in cash flows from investing activities 
E) An increase in cash flows from financing activities

Question 18

Based on the following information provided about a company's operations,calculate its cost of goods purchased and its cash paid for merchandise.

Accepted Answer

The answer of Based on the following information provided about...

Question 19

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.

Accepted Answer

A) $727,000. 
B) $726,300. 
C) $732,700. 
D) $737,300. 
E) $737,700. 
A) $727,000. 
B) $726,300. 
C) $732,700. 
D) $737,300. 
E) $737,700.

Question 20

The use of a spreadsheet for analysis is especially useful when preparing the statement of cash flows using the _____________ method.

Accepted Answer

The answer of The use of a spreadsheet for analysis...

Exam 16: Reporting the Statement of Cash Flows

Most managers stress the importance of understanding and predicting cash flows for business decisions.

Cash paid for merchandise is an operating activity.

In preparing a company's statement of cash flows for the most recent year using the indirect method,the following information is available: Net cash provided by operating activities was:

A company had average total assets of $3,216,000,total cash flows of $1,320,000,cash flows from operations of $554,000,and cash flows for plant assets of $850,000.The cash flow on total assets ratio equals:

The cash flow on total assets ratio is computed by dividing average total assets by operating income.

Business activities that generate or use cash are classified as operating,investing,or financing activities on the statement of cash flows.

The payment of cash dividends never changes the balance of retained earnings.

The accountant for Huckleberry Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available: What is the ending balance for retained earnings?

The accountant for Crusoe Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available: The amount of cash dividends paid during the year would be:

When preparing a statement of cash flows using the indirect method,each of the following should be classified as an operating cash flow except:

A company's transactions with its creditors to borrow money and/or to repay the principal amounts of both short- and long-term debt are reported as cash flows from:

Based on the information in the following income statement and balance sheet for Monterey Corporation,determine the cash flows from operating activities using the direct method.

Addams Corporation paid cash dividends totaling $75,000 during its most recent fiscal year.How should this information be reported on Addam's statement of cash flows?

The FASB requires a reconciliation of net income to net cash provided or used by operating activities when the ______________ method is used.

Which of the following is included in the cash flows from financing activities section of the statement of cash flows?

An increase in the accounts receivable account during the year should be reported on the statement of cash flows as:

Based on the following information provided about a company's operations,calculate its cost of goods purchased and its cash paid for merchandise.

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.

The use of a spreadsheet for analysis is especially useful when preparing the statement of cash flows using the _____________ method.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Appendix B: Time Value of Money

Appendix C: Activity-Based Costing

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