Question 1

The first line item in the operating activities section of a spreadsheet for a statement of cash flows prepared using the indirect method is:

Accepted Answer

A) Cash. 
B) Cash received from customers. 
C) Increase (decrease)in accounts receivable. 
D) Net income (loss). 
E) Adjustments to net income. 
A) Cash. 
B) Cash received from customers. 
C) Increase (decrease)in accounts receivable. 
D) Net income (loss). 
E) Adjustments to net income.

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Use the following information to calculate cash paid for wages and salaries: $\begin{array}{lr}
\text {Salaries expense }&\$168,000\
\text {Salaries payable, January 1 }&6,400\
\text {Salaries payable, December 31 }&10,600\
\end{array}$

Accepted Answer

A) $157,400. 
B) $163,800. 
C) $168,000. 
D) $172,200. 
E) $174,400. 
A) $157,400. 
B) $163,800. 
C) $168,000. 
D) $172,200. 
E) $174,400.

Question 4

When using a spreadsheet to prepare the statement of cash flows,an increase in accounts payable is entered in the Analysis of Changes columns with a debit in the statement of cash flows section and a credit in the balance sheet section.

Accepted Answer

A) True 
 B)False

Question 5

Explain the purpose and format of the statement of cash flows.Also describe its relevance to decision makers.

Accepted Answer

The purpose of the statement of cash flo

Question 6

Financing activities include receiving cash from issuing debt and paying cash dividends to shareholders.

Accepted Answer

A) True 
 B)False

Question 7

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 8

When analyzing the changes on a spreadsheet used to prepare a statement of cash flows,the cash flows from investing activities generally affect:

Accepted Answer

A) Net income,current assets,and current liabilities. 
B) Noncurrent assets. 
C) Noncurrent liability and equity accounts. 
D) Both noncurrent assets and noncurrent liabilities. 
E) Equity accounts only. 
A) Net income,current assets,and current liabilities. 
B) Noncurrent assets. 
C) Noncurrent liability and equity accounts. 
D) Both noncurrent assets and noncurrent liabilities. 
E) Equity accounts only.

Question 9

The primary purpose of the statement of cash flows is to report all major cash receipts (inflows)and cash payments (outflows)during a period.

Accepted Answer

A) True 
 B)False

Question 10

Since it is recommended by the FASB,the direct method of preparing the statement of cash flows is most frequently used.

Accepted Answer

A) True 
 B)False

Question 11

Financing activities include (a)the purchase and sale of long-term assets,(b)the purchase and sale of short-term investments,and (c)lending and collecting on loans.

Accepted Answer

A) True 
 B)False

Question 12

When preparing the operating activities section of the statement of cash flows using the indirect method,depreciation is subtracted from net income.

Accepted Answer

A) True 
 B)False

Question 13

In preparing Marjorie Company's statement of cash flows for the most recent year,the following information is available:   Net cash flows from investing activities for the year were:

Accepted Answer

A) $438,000 of net cash used. 
B) $438,000 of net cash provided. 
C) $264,000 of net cash used. 
D) $351,000 of net cash used. 
E) $264,000 of net cash provided. 
A) $438,000 of net cash used. 
B) $438,000 of net cash provided. 
C) $264,000 of net cash used. 
D) $351,000 of net cash used. 
E) $264,000 of net cash provided.

Question 14

The statement of cash flows reports and proves the net change in cash for a reporting period.

Accepted Answer

A) True 
 B)False

Question 15

The cash flows from operating activities section of an indirect method of cash flows begins with net income or loss.

Accepted Answer

A) True 
 B)False

Question 16

Use the following financial statements and additional information to (1)prepare a statement of cash flows for the year ended December 31,20X2 using the indirect method,and (2)compute the company's cash flow on total assets ratio for 20X2.
     Additional Information
a.A $20,000 note payable is retired at its carrying value in exchange for cash.
b.The only changes affecting retained earnings are net income and cash dividends paid.
c.New equipment is acquired for $120,000 cash.
d.Received cash for the sale of equipment that had cost $85,000,yielding a gain of $4,700.
e.Prepaid expenses relate to Other Expenses on the income statement.
f.All purchases and sales of merchandise inventory are on credit.

Accepted Answer

(1) @#IMG-DLM& (2)$1

Question 17

A purchase of land in exchange for a long-term note payable must be disclosed as a noncash investing and financing activity.

Accepted Answer

A) True 
 B)False

Question 18

The direct method for the preparation of the operating activities section of the statement of cash flows:

Accepted Answer

A) Separately lists each major item of operating cash receipts and cash payments. 
B) Reports adjustments to reconcile net income to net cash provided or used by operating activities in the statement. 
C) Reports a different amount of cash flows from operations than if the indirect method is used. 
D) Is required if the company is a merchandiser. 
E) Is required by the FASB. 
A) Separately lists each major item of operating cash receipts and cash payments. 
B) Reports adjustments to reconcile net income to net cash provided or used by operating activities in the statement. 
C) Reports a different amount of cash flows from operations than if the indirect method is used. 
D) Is required if the company is a merchandiser. 
E) Is required by the FASB.

Question 19

On a spreadsheet used to prepare the operating activities section of the statement of cash flows,depreciation expense does not require an entry in the Analysis of Changes columns because it is a noncash item.

Accepted Answer

A) True 
 B)False

Question 20

Keita Co.reported net income of $213.4 million,net cash provided by operating activities of $151.3 million,total cash flows of $187.7 million,and average total assets of 2,314.8 million at the end of the year.Calculate the cash flow on total assets ratio for Keita.

Accepted Answer

Cash Flow on Total Assets = Op

The first line item in the operating activities section of a spreadsheet for a statement of cash flows prepared using the indirect method is:

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

Use the following information to calculate cash paid for wages and salaries: Salaries expense \1 68,000 Salaries payable, January 1 6,400 Salaries payable, December 31 10,600

When using a spreadsheet to prepare the statement of cash flows,an increase in accounts payable is entered in the Analysis of Changes columns with a debit in the statement of cash flows section and a credit in the balance sheet section.

Explain the purpose and format of the statement of cash flows.Also describe its relevance to decision makers.

Financing activities include receiving cash from issuing debt and paying cash dividends to shareholders.

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

When analyzing the changes on a spreadsheet used to prepare a statement of cash flows,the cash flows from investing activities generally affect:

The primary purpose of the statement of cash flows is to report all major cash receipts (inflows)and cash payments (outflows)during a period.

Since it is recommended by the FASB,the direct method of preparing the statement of cash flows is most frequently used.

Financing activities include (a)the purchase and sale of long-term assets,(b)the purchase and sale of short-term investments,and (c)lending and collecting on loans.

When preparing the operating activities section of the statement of cash flows using the indirect method,depreciation is subtracted from net income.

In preparing Marjorie Company's statement of cash flows for the most recent year,the following information is available: Net cash flows from investing activities for the year were:

The statement of cash flows reports and proves the net change in cash for a reporting period.

The cash flows from operating activities section of an indirect method of cash flows begins with net income or loss.

A purchase of land in exchange for a long-term note payable must be disclosed as a noncash investing and financing activity.

The direct method for the preparation of the operating activities section of the statement of cash flows:

On a spreadsheet used to prepare the operating activities section of the statement of cash flows,depreciation expense does not require an entry in the Analysis of Changes columns because it is a noncash item.

Keita Co.reported net income of $213.4 million,net cash provided by operating activities of $151.3 million,total cash flows of $187.7 million,and average total assets of 2,314.8 million at the end of the year.Calculate the cash flow on total assets ratio for Keita.

Introducing Financial Statements

Financial Statements and the Accounting System

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash,fraud,and Internal Control

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments

International Operations

Filters

Exam 12: Reporting and Analyzing Cash Flows

The first line item in the operating activities section of a spreadsheet for a statement of cash flows prepared using the indirect method is:

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

Use the following information to calculate cash paid for wages and salaries: Salaries expense \1 68,000 Salaries payable, January 1 6,400 Salaries payable, December 31 10,600

When using a spreadsheet to prepare the statement of cash flows,an increase in accounts payable is entered in the Analysis of Changes columns with a debit in the statement of cash flows section and a credit in the balance sheet section.

Explain the purpose and format of the statement of cash flows.Also describe its relevance to decision makers.

Financing activities include receiving cash from issuing debt and paying cash dividends to shareholders.

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

When analyzing the changes on a spreadsheet used to prepare a statement of cash flows,the cash flows from investing activities generally affect:

The primary purpose of the statement of cash flows is to report all major cash receipts (inflows)and cash payments (outflows)during a period.

Since it is recommended by the FASB,the direct method of preparing the statement of cash flows is most frequently used.

Financing activities include (a)the purchase and sale of long-term assets,(b)the purchase and sale of short-term investments,and (c)lending and collecting on loans.

When preparing the operating activities section of the statement of cash flows using the indirect method,depreciation is subtracted from net income.

In preparing Marjorie Company's statement of cash flows for the most recent year,the following information is available: Net cash flows from investing activities for the year were:

The statement of cash flows reports and proves the net change in cash for a reporting period.

The cash flows from operating activities section of an indirect method of cash flows begins with net income or loss.

A purchase of land in exchange for a long-term note payable must be disclosed as a noncash investing and financing activity.

The direct method for the preparation of the operating activities section of the statement of cash flows:

On a spreadsheet used to prepare the operating activities section of the statement of cash flows,depreciation expense does not require an entry in the Analysis of Changes columns because it is a noncash item.

Keita Co.reported net income of $213.4 million,net cash provided by operating activities of $151.3 million,total cash flows of $187.7 million,and average total assets of 2,314.8 million at the end of the year.Calculate the cash flow on total assets ratio for Keita.

Introducing Financial Statements

Financial Statements and the Accounting System

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash,fraud,and Internal Control

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments

International Operations

Filters