Question 1

In arriving at cash from operating activities, adding a decrease in Supplies to net income eliminates the effect of recording adjusts net income for transactions that:

Accepted Answer

A)  increased net income, but has not been paid in cash this period. 
B)  decreased net income, but has not been paid in cash this period. 
C)  decreased net income and decreased cash. 
D)  flow this period increased net income and increased cash flow this perioD.
Adding decreases in current assets eliminates the effects of some transactions that decreased net income but did not affect cash in the current perioD.
For example, when Supplies are used, net income decreases but cash is not affecteD.
To eliminate these noncash effects from our cash flow computations, we must add back decreases in Supplies and other current assets. 
A)  increased net income, but has not been paid in cash this period. 
B)  decreased net income, but has not been paid in cash this period. 
C)  decreased net income and decreased cash. 
D)  flow this period increased net income and increased cash flow this perioD.
Adding decreases in current assets eliminates the effects of some transactions that decreased net income but did not affect cash in the current perioD.
For example, when Supplies are used, net income decreases but cash is not affecteD.
To eliminate these noncash effects from our cash flow computations, we must add back decreases in Supplies and other current assets.

Question 2

If a company's Sales Revenue was $171,356 and cash collected from customers was $167,803, which of the following would be consistent with this difference?

Accepted Answer

A)  Accounts Receivable could have decreased. 
B)  Cash payments could have been larger than the related expense accounts. 
C)  Accounts Receivable could have increased. 
D)  Cash payments could have been smaller than the related expense accounts. 
A)  Accounts Receivable could have decreased. 
B)  Cash payments could have been larger than the related expense accounts. 
C)  Accounts Receivable could have increased. 
D)  Cash payments could have been smaller than the related expense accounts.

Question 3

When the indirect method is used to determine net cash provided by (used in) operating activities, subtracting an increase in Accounts Receivable from net income eliminates the effect of recording revenue that:

Accepted Answer

A)  increased net income, but did not impact cash. 
B)  decreased net income, but did not impact cash. 
C)  increased net income and increased cash flow. 
D)  decreased net income and decreased cash flow. 
A)  increased net income, but did not impact cash. 
B)  decreased net income, but did not impact cash. 
C)  increased net income and increased cash flow. 
D)  decreased net income and decreased cash flow.

Question 4

St. Pierre Enterprises reported the following information in its financial statements:   What is the amount of cash collected from customers during the current year?

Accepted Answer

A)  $350,000 
B)  $380,500 
C)  $340,000 
D)  $410,000 
A)  $350,000 
B)  $380,500 
C)  $340,000 
D)  $410,000

Question 5

If Sales are $850,000 and the beginning and ending balances of Accounts Receivable are $43,000 and $48,000, respectively, the cash collected from customers is:

Accepted Answer

A)  $850,000. 
B)  $802,000. 
C)  $845,000. 
D)  $855,000. 
A)  $850,000. 
B)  $802,000. 
C)  $845,000. 
D)  $855,000.

Question 6

Cash provided by issuing stock to owners should be reported as cash:

Accepted Answer

A)  inflows from financing activities. 
B)  outflows from financing activities. 
C)  inflows from investing activities. 
D)  outflows from investing activities. 
A)  inflows from financing activities. 
B)  outflows from financing activities. 
C)  inflows from investing activities. 
D)  outflows from investing activities.

Question 7

The payment of salaries and wages would be reported as an operating activity on the statement of cash flows

Accepted Answer

A) True 
 B)False

Question 8

Assume that a company chooses the indirect method to determine net cash flows from operating activities.
Required:
Part a. Explain why net income is the starting point when the indirect method is used to determine cash flows from operating activities.
Part b. Briefly explain why a company's net income is most likely different in amount than its cash flows from operating activities.

Accepted Answer

Part a.
The cash flows from operating ac

In arriving at cash from operating activities, adding a decrease in Supplies to net income eliminates the effect of recording adjusts net income for transactions that:

If a company's Sales Revenue was $171,356 and cash collected from customers was $167,803, which of the following would be consistent with this difference?

When the indirect method is used to determine net cash provided by (used in) operating activities, subtracting an increase in Accounts Receivable from net income eliminates the effect of recording revenue that:

St. Pierre Enterprises reported the following information in its financial statements: What is the amount of cash collected from customers during the current year?

If Sales are $850,000 and the beginning and ending balances of Accounts Receivable are $43,000 and $48,000, respectively, the cash collected from customers is:

Cash provided by issuing stock to owners should be reported as cash:

The payment of salaries and wages would be reported as an operating activity on the statement of cash flows

Introduction to Managerial Accounting

Job-Order Costing

Process Costing

Activity-Based Cost Management

Cost Behavior and Estimation

Cost-Volume-Profit Analysis

Incremental Analysis for Short-Term Decision Making

Budgeting and Planning

Standard Costing and Variances

Decentralized Performance Evaluation

Capital Budgeting

Financial Statement Analysis

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Exam 12: Statement of Cash Flows

In arriving at cash from operating activities, adding a decrease in Supplies to net income eliminates the effect of recording adjusts net income for transactions that:

If a company's Sales Revenue was $171,356 and cash collected from customers was $167,803, which of the following would be consistent with this difference?

When the indirect method is used to determine net cash provided by (used in) operating activities, subtracting an increase in Accounts Receivable from net income eliminates the effect of recording revenue that:

St. Pierre Enterprises reported the following information in its financial statements: What is the amount of cash collected from customers during the current year?

If Sales are $850,000 and the beginning and ending balances of Accounts Receivable are $43,000 and $48,000, respectively, the cash collected from customers is:

Cash provided by issuing stock to owners should be reported as cash:

The payment of salaries and wages would be reported as an operating activity on the statement of cash flows

Introduction to Managerial Accounting

Job-Order Costing

Process Costing

Activity-Based Cost Management

Cost Behavior and Estimation

Cost-Volume-Profit Analysis

Incremental Analysis for Short-Term Decision Making

Budgeting and Planning

Standard Costing and Variances

Decentralized Performance Evaluation

Capital Budgeting

Financial Statement Analysis

Filters