Question 1

When the indirect method is used,if accounts payable increases during the accounting period,the change in accounts payable is:

Accepted Answer

A) added to the change in the cash account. 
B) added to net income. 
C) subtracted from net income. 
D) subtracted from the change in the cash account. 
A) added to the change in the cash account. 
B) added to net income. 
C) subtracted from net income. 
D) subtracted from the change in the cash account.

Question 2

Which of the following would be classified as a financing activity on the statement of cash flows?

Accepted Answer

A) Cash receipts from accounts receivable collections. 
B) Cash receipts from sale of equipment. 
C) Cash paid to purchase treasury stock. 
D) Cash paid for interest on notes payable. 
A) Cash receipts from accounts receivable collections. 
B) Cash receipts from sale of equipment. 
C) Cash paid to purchase treasury stock. 
D) Cash paid for interest on notes payable.

Question 3

Bardell,Inc.prepared its statement of cash flows for the year.The following information is taken from that statement:   What is the amount of net cash provided by (used in)financing activities?

Accepted Answer

A) $30,800 
B) ($6,600) 
C) ($30,800) 
D) $6,600 
A) $30,800 
B) ($6,600) 
C) ($30,800) 
D) $6,600

Question 4

Blanton Ridge,Inc.'s Salaries and Wages Expense is $900,000 during the year and the beginning and ending balances of Salaries and Wages Payable are $36,000 and $33,000,respectively,the cash paid to employees is:

Accepted Answer

A) $900,000. 
B) $867,000. 
C) $897,000. 
D) $903,000. 
A) $900,000. 
B) $867,000. 
C) $897,000. 
D) $903,000.

Question 5

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 6

The direct exchange of debt for equipment would be shown:

Accepted Answer

A) on the statement of cash flows as an operating activity. 
B) on the statement of cash flows as an investing activity. 
C) on the statement of cash flows as a financing activity. 
D) as a supplementary disclosure to the statement of cash flows. 
A) on the statement of cash flows as an operating activity. 
B) on the statement of cash flows as an investing activity. 
C) on the statement of cash flows as a financing activity. 
D) as a supplementary disclosure to the statement of cash flows.

Question 7

The receipt of dividends and interest are both reported as cash inflows from investing activities on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 8

When preparing the operating activities section of the statement of cash flows using the indirect method,accumulated depreciation is added to net income in the operating section.

Accepted Answer

A) True 
 B)False

Question 9

Cash flows from operating activities include all of the following except:

Accepted Answer

A) a purchase of land. 
B) collections from customers on account. 
C) payments to employees for hours worked. 
D) receipt of cash dividends. 
A) a purchase of land. 
B) collections from customers on account. 
C) payments to employees for hours worked. 
D) receipt of cash dividends.

Question 10

If sales are $680,000 and the beginning and ending balances of Accounts Receivable are $34,400 and $38,400,respectively,the cash collected from customers is:

Accepted Answer

A) $680,000. 
B) $641,600. 
C) $676,000. 
D) $684,000. 
A) $680,000. 
B) $641,600. 
C) $676,000. 
D) $684,000.

Question 11

The cash flow statement should be evaluated by examining the cash flow pattern suggested by the:

Accepted Answer

A) subtotals of each of the three main sections. 
B) operating activities section since this section details the day to day operations of the business. 
C) change in cash regardless of which section had the biggest impact on the change. 
D) financing section since this section details how much debt the company has incurred. 
A) subtotals of each of the three main sections. 
B) operating activities section since this section details the day to day operations of the business. 
C) change in cash regardless of which section had the biggest impact on the change. 
D) financing section since this section details how much debt the company has incurred.

Question 12

A general rule for the relationship between operating,investing,and financing cash flows and the financial statements is:

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 13

Which of the following represents a cash inflow from financing activities?

Accepted Answer

A) Issuing stock in exchange for another company's stock. 
B) Paying a bond's face value at maturity. 
C) Issuing long-term bonds at a discount. 
D) Receiving interest on promissory notes. 
A) Issuing stock in exchange for another company's stock. 
B) Paying a bond's face value at maturity. 
C) Issuing long-term bonds at a discount. 
D) Receiving interest on promissory notes.

Question 14

Which of the following statements about cash flows from financing activities is correct?

Accepted Answer

A) When a company borrows from lenders,a cash outflow from financing activities has occurred. 
B) When a company receives cash dividends,a cash inflow from financing activities has occurred. 
C) When a company repurchases its own stock,a cash outflow for financing activities has occurred. 
D) When a company pays cash dividends,a cash inflow from financing activities has occurred. 
A) When a company borrows from lenders,a cash outflow from financing activities has occurred. 
B) When a company receives cash dividends,a cash inflow from financing activities has occurred. 
C) When a company repurchases its own stock,a cash outflow for financing activities has occurred. 
D) When a company pays cash dividends,a cash inflow from financing activities has occurred.

Question 15

Free cash flow may be used for all of the following except:

Accepted Answer

A) expanding the business. 
B) paying off debt. 
C) building up the cash balance. 
D) paying employees. 
A) expanding the business. 
B) paying off debt. 
C) building up the cash balance. 
D) paying employees.

Question 16

Assume that the direct method is used to prepare the operating activities section of the statement of cash flows.When Accrued Liabilities increase,it means that the company:

Accepted Answer

A) paid more cash than it recorded as operating expenses. 
B) paid less cash than it recorded as operating expenses. 
C) prepaid the operating expenses before they were incurred or recorded. 
D) paid for the operating expenses as they were recorded. 
A) paid more cash than it recorded as operating expenses. 
B) paid less cash than it recorded as operating expenses. 
C) prepaid the operating expenses before they were incurred or recorded. 
D) paid for the operating expenses as they were recorded.

Question 17

In calculating the net cash provided by or used in operations using the indirect method,which of the following items would be added to net income?

Accepted Answer

A) An increase in Accounts Receivable. 
B) A decrease in Prepaid Rent. 
C) An increase in long-lived assets. 
D) A decrease in Salaries and Wages Payable. 
A) An increase in Accounts Receivable. 
B) A decrease in Prepaid Rent. 
C) An increase in long-lived assets. 
D) A decrease in Salaries and Wages Payable.

Question 18

Which of the following statements about the statement of cash flows is not correct?

Accepted Answer

A) GAAP requires every company to report a statement of cash flows. 
B) The statement of cash flows is contained in the notes to the financial statements. 
C) The statement of cash flows is needed because the income statement and balance sheet do not provide adequate information about the changes in cash. 
D) The statement of cash flows provides information about how each major type of business activity causes a company's cash to change. 
A) GAAP requires every company to report a statement of cash flows. 
B) The statement of cash flows is contained in the notes to the financial statements. 
C) The statement of cash flows is needed because the income statement and balance sheet do not provide adequate information about the changes in cash. 
D) The statement of cash flows provides information about how each major type of business activity causes a company's cash to change.

Question 19

Castle Company's sales revenue was $584,696 and cash collected from customers was $587,003,which of the following would be consistent with this difference?

Accepted Answer

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

Question 20

The introductory phase of a company's life cycle will most likely have net cash:

Accepted Answer

A) provided by investing activities. 
B) used in financing activities. 
C) used in investing activities. 
D) provided by operating activities. 
A) provided by investing activities. 
B) used in financing activities. 
C) used in investing activities. 
D) provided by operating activities.

When the indirect method is used,if accounts payable increases during the accounting period,the change in accounts payable is:

Which of the following would be classified as a financing activity on the statement of cash flows?

Bardell,Inc.prepared its statement of cash flows for the year.The following information is taken from that statement: What is the amount of net cash provided by (used in)financing activities?

Blanton Ridge,Inc.'s Salaries and Wages Expense is $900,000 during the year and the beginning and ending balances of Salaries and Wages Payable are $36,000 and $33,000,respectively,the cash paid to employees is:

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:

The direct exchange of debt for equipment would be shown:

The receipt of dividends and interest are both reported as cash inflows from investing activities on the statement of cash flows.

When preparing the operating activities section of the statement of cash flows using the indirect method,accumulated depreciation is added to net income in the operating section.

Cash flows from operating activities include all of the following except:

If sales are $680,000 and the beginning and ending balances of Accounts Receivable are $34,400 and $38,400,respectively,the cash collected from customers is:

The cash flow statement should be evaluated by examining the cash flow pattern suggested by the:

A general rule for the relationship between operating,investing,and financing cash flows and the financial statements is:

Which of the following represents a cash inflow from financing activities?

Which of the following statements about cash flows from financing activities is correct?

Free cash flow may be used for all of the following except:

Assume that the direct method is used to prepare the operating activities section of the statement of cash flows.When Accrued Liabilities increase,it means that the company:

In calculating the net cash provided by or used in operations using the indirect method,which of the following items would be added to net income?

Which of the following statements about the statement of cash flows is not correct?

Castle Company's sales revenue was $584,696 and cash collected from customers was $587,003,which of the following would be consistent with this difference?

The introductory phase of a company's life cycle will most likely have net cash:

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing and Cost Management

Cost Behavior

Cost-Volume-Profit Analysis

Incremental Analysis for Short-Term Decision Making

Budgetary Planning

Standard Costing and Variance Analysis

Decentralized Performance Evaluation

Capital Budgeting

Measuring and Evaluating Financial Performance

Filters

Exam 12: Statement of Cash Flows

When the indirect method is used,if accounts payable increases during the accounting period,the change in accounts payable is:

Which of the following would be classified as a financing activity on the statement of cash flows?

Bardell,Inc.prepared its statement of cash flows for the year.The following information is taken from that statement: What is the amount of net cash provided by (used in)financing activities?

Blanton Ridge,Inc.'s Salaries and Wages Expense is $900,000 during the year and the beginning and ending balances of Salaries and Wages Payable are $36,000 and $33,000,respectively,the cash paid to employees is:

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:

The direct exchange of debt for equipment would be shown:

The receipt of dividends and interest are both reported as cash inflows from investing activities on the statement of cash flows.

When preparing the operating activities section of the statement of cash flows using the indirect method,accumulated depreciation is added to net income in the operating section.

Cash flows from operating activities include all of the following except:

If sales are $680,000 and the beginning and ending balances of Accounts Receivable are $34,400 and $38,400,respectively,the cash collected from customers is:

The cash flow statement should be evaluated by examining the cash flow pattern suggested by the:

A general rule for the relationship between operating,investing,and financing cash flows and the financial statements is:

Which of the following represents a cash inflow from financing activities?

Which of the following statements about cash flows from financing activities is correct?

Free cash flow may be used for all of the following except:

Assume that the direct method is used to prepare the operating activities section of the statement of cash flows.When Accrued Liabilities increase,it means that the company:

In calculating the net cash provided by or used in operations using the indirect method,which of the following items would be added to net income?

Which of the following statements about the statement of cash flows is not correct?

Castle Company's sales revenue was $584,696 and cash collected from customers was $587,003,which of the following would be consistent with this difference?

The introductory phase of a company's life cycle will most likely have net cash:

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing and Cost Management

Cost Behavior

Cost-Volume-Profit Analysis

Incremental Analysis for Short-Term Decision Making

Budgetary Planning

Standard Costing and Variance Analysis

Decentralized Performance Evaluation

Capital Budgeting

Measuring and Evaluating Financial Performance

Filters