Question 1

Define and discuss the differences between operating,investing,and financing activities.

Accepted Answer

Operating activities involve the day-to-

Question 2

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 3

When preparing the operating activities section of the statement of cash flows using the direct method,non-operating losses are added to net income.

Accepted Answer

A) True 
 B)False

Question 4

Use the following information about the current year's operations of a company to calculate cash provided by operations.

Accepted Answer

A) $85,000. 
B) $89,000. 
C) $97,000. 
D) $81,000. 
E) $105,000. 
A) $85,000. 
B) $89,000. 
C) $97,000. 
D) $81,000. 
E) $105,000.

Question 5

For each of the following separate cases,use the information provided to calculate the missing cash inflow or cash outflow using the direct method.

Accepted Answer

The answer of For each of the following separate cases,use...

Question 6

Babson reported assets of $13,362 million at January 1 and $13,369 million as of December 31 of the current year.Babson's net cash flows from operations were $2,204 million.Calculate the cash flow on total assets ratio for Babson.

Accepted Answer

Cash Flow on Total Assets = Ca

Question 7

Jeffreys Company reports depreciation expense of $40,000 for Year 2.Also,equipment costing $240,000 was sold for a $10,000 loss in Year 2.The following selected information is available for Jeffreys Company from its comparative balance sheet.Compute the cash received from the sale of the equipment. $\begin{array}{lcc}
\text { At December 31 } & \text { Year 2 } & \text { Year 1 } \
\text { Equipment } & \$ 510,000 & \$ 750,000 \
\text { Accumulated Depreciation-Equipment } & 328,000 & 500,000
\end{array}$

Accepted Answer

A) $62,000. 
B) $38,000. 
C) $28,000. 
D) $18,000. 
E) $58,000. 
A) $62,000. 
B) $38,000. 
C) $28,000. 
D) $18,000. 
E) $58,000.

Question 8

Define the cash flow on total assets ratio and explain how it is used to evaluate cash flows and to assess company performance.

Accepted Answer

The cash flow on total assets ratio is d

Question 9

The reporting of financing activities in the statement of cash flows is identical under either the direct or indirect methods.

Accepted Answer

A) True 
 B)False

Question 10

Use the following information to calculate cash received from dividends:

Accepted Answer

A) $63,500. 
B) $63,000. 
C) $64,000. 
D) $67,100. 
E) $60,400. 
A) $63,500. 
B) $63,000. 
C) $64,000. 
D) $67,100. 
E) $60,400.

Question 11

The gain or loss from retirement of debt is reported under cash flows from operating activities on the statement of cash flows using the indirect method.

Accepted Answer

A) True 
 B)False

Question 12

Information to prepare the statement of cash flows usually comes from (a)comparative balance sheets,(b)current income statement,and (c)additional information.

Accepted Answer

A) True 
 B)False

Question 13

Use the following financial statements and additional information to (1)prepare a complete statement of cash flows for the year ended December 31,20X2.The cash provided or used by operating activities should be reported using the direct 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 14

Equipment costing $400,000 with accumulated depreciation of $260,000 is sold at a gain of $10,000.This implies that $130,000 cash was received from the sale.

Accepted Answer

A) True 
 B)False

Question 15

All of the following statements related to reporting cash flows from operating activities under U.S.GAAP and IFRS are true except:

Accepted Answer

A) The definition of cash and cash equivalents is similar for U.S.GAAP and IFRS. 
B) U.S.GAAP requires cash flows from interest revenue and dividend revenue be classified as operating activities. 
C) IFRS permits classification of interest revenue and dividend revenue under operating or investing activities. 
D) U.S.GAAP requires cash outflows for interest expense to be classified as financing activities. 
E) IFRS permits classification of interest expense under operating or financing activities. 
A) The definition of cash and cash equivalents is similar for U.S.GAAP and IFRS. 
B) U.S.GAAP requires cash flows from interest revenue and dividend revenue be classified as operating activities. 
C) IFRS permits classification of interest revenue and dividend revenue under operating or investing activities. 
D) U.S.GAAP requires cash outflows for interest expense to be classified as financing activities. 
E) IFRS permits classification of interest expense under operating or financing activities.

Question 16

The appropriate section in the statement of cash flows for reporting the cash received from customers is:

Accepted Answer

A) Operating activities. 
B) Investing activities. 
C) Financing activities. 
D) Schedule of noncash investing or financing activity. 
E) This is not reported on the statement of cash flows. 
A) Operating activities. 
B) Investing activities. 
C) Financing activities. 
D) Schedule of noncash investing or financing activity. 
E) This is not reported on the statement of cash flows.

Question 17

In preparing a company's statement of cash flows for the most recent year using the indirect method,the following information is available: $\begin{array}{lr}
\text { Net income for the year was } & 52,000 \
\text { Accounts payable increased by } & 18,000 \
\text { Accounts receivable decreased by } & 25,000 \
\text { Inventories decreased by } & 5,000 \
\text { Cash dividends paid were } & 14,000 \
\text { Depreciation expense was } & 20,000
\end{array}$ Net cash provided by operating activities was:

Accepted Answer

A) $120,000. 
B) $71,000. 
C) $70,000. 
D) $24,000. 
E) $110,000. 
A) $120,000. 
B) $71,000. 
C) $70,000. 
D) $24,000. 
E) $110,000.

Question 18

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) $71,000. 
C) $70,000. 
D) $24,000. 
E) $110,000 
A) $120,000. 
B) $71,000. 
C) $70,000. 
D) $24,000. 
E) $110,000

Question 19

Use the following information to calculate cash paid for income taxes:

Accepted Answer

A) $50,000. 
B) $59,000. 
C) $57,000. 
D) $48,000. 
E) $52,000. 
A) $50,000. 
B) $59,000. 
C) $57,000. 
D) $48,000. 
E) $52,000.

Question 20

Explain the value of separating cash flows into operating activities,investing activities,and financing activities to financial statement users in analyzing cash flows and the company's financial performance and condition.

Accepted Answer

By separating cash flows into three cate

Define and discuss the differences between operating,investing,and financing activities.

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

When preparing the operating activities section of the statement of cash flows using the direct method,non-operating losses are added to net income.

Use the following information about the current year's operations of a company to calculate cash provided by operations.

For each of the following separate cases,use the information provided to calculate the missing cash inflow or cash outflow using the direct method.

Babson reported assets of $13,362 million at January 1 and $13,369 million as of December 31 of the current year.Babson's net cash flows from operations were $2,204 million.Calculate the cash flow on total assets ratio for Babson.

Define the cash flow on total assets ratio and explain how it is used to evaluate cash flows and to assess company performance.

The reporting of financing activities in the statement of cash flows is identical under either the direct or indirect methods.

Use the following information to calculate cash received from dividends:

The gain or loss from retirement of debt is reported under cash flows from operating activities on the statement of cash flows using the indirect method.

Information to prepare the statement of cash flows usually comes from (a)comparative balance sheets,(b)current income statement,and (c)additional information.

Equipment costing $400,000 with accumulated depreciation of $260,000 is sold at a gain of $10,000.This implies that $130,000 cash was received from the sale.

All of the following statements related to reporting cash flows from operating activities under U.S.GAAP and IFRS are true except:

The appropriate section in the statement of cash flows for reporting the cash received from customers is:

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:

Use the following information to calculate cash paid for income taxes:

Explain the value of separating cash flows into operating activities,investing activities,and financing activities to financial statement users in analyzing cash flows and the company's financial performance and condition.

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

Define and discuss the differences between operating,investing,and financing activities.

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

When preparing the operating activities section of the statement of cash flows using the direct method,non-operating losses are added to net income.

Use the following information about the current year's operations of a company to calculate cash provided by operations.

For each of the following separate cases,use the information provided to calculate the missing cash inflow or cash outflow using the direct method.

Babson reported assets of $13,362 million at January 1 and $13,369 million as of December 31 of the current year.Babson's net cash flows from operations were $2,204 million.Calculate the cash flow on total assets ratio for Babson.

Define the cash flow on total assets ratio and explain how it is used to evaluate cash flows and to assess company performance.

The reporting of financing activities in the statement of cash flows is identical under either the direct or indirect methods.

Use the following information to calculate cash received from dividends:

The gain or loss from retirement of debt is reported under cash flows from operating activities on the statement of cash flows using the indirect method.

Information to prepare the statement of cash flows usually comes from (a)comparative balance sheets,(b)current income statement,and (c)additional information.

Equipment costing $400,000 with accumulated depreciation of $260,000 is sold at a gain of $10,000.This implies that $130,000 cash was received from the sale.

All of the following statements related to reporting cash flows from operating activities under U.S.GAAP and IFRS are true except:

The appropriate section in the statement of cash flows for reporting the cash received from customers is:

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:

Use the following information to calculate cash paid for income taxes:

Explain the value of separating cash flows into operating activities,investing activities,and financing activities to financial statement users in analyzing cash flows and the company's financial performance and condition.

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