Exam 11: Statement of Cash Flows

Authentic Exposure Company had the following transactions that took place during the year: I) Recorded credit sales of $2,500 II) Collected $1,500 from customers III) Recorded sales returns of $500 and credited the customer's account. What is the total effect of these transactions on free cash flow? Cash Flow A)Increase B)Decrease C)No Effect D)Cannot be determined

Using the indirect method, an increase in accounts receivable during a period is deducted from net income in calculating cash provided by operations.

If $2,500,000 of bonds are issued during the year but $4,000,000 of old bonds are retired during the year, the statement of cash flows will show a(n)

Any item that appears on the income statement would be considered as either a cash inflow or cash outflow from operating activities.

Assume that the E-Zip Corporation uses the indirect method to depict cash flows. Indicate where, if at all, common stock issued for cash would be classified.

In preparing the statement of cash flows, determining the net increase or decrease in cash requires the use of

Assume that the E-Zip Corporation uses the indirect method to depict cash flows. Indicate where, if at all, land purchased for cash would be classified on the statement of cash flows.

Which of the following is not typically a characteristic experienced by a company during the growth phase of the corporate life cycle?

In preparing a statement of cash flows, an increase in the Common Stock and Treasury Stock accounts during a period would be an investing activity.

Using the indirect method, an increase in accounts payable during a period is deducted from net income in calculating cash provided by operations.

A company had net income of $890,000. Depreciation expense is $110,000. During the year, accounts receivable and inventory increased $60,000 and $160,000, respectively. Prepaid expenses and accounts payable decreased $8,000 and $16,000, respectively. There was also a loss on the sale of equipment of $12,000. How much cash was provided by operating activities?

In calculating cash flows from operating activities using the indirect method, a gain on the sale of equipment is

Cash provided by operations is generally equal to operating income.

Assume that the E-Zip Corporation uses the indirect method to depict cash flows. Indicate where, if at all, land and building purchased with a mortgage would be classified on the statement of cash flows.

Cash from investing becomes less positive and cash from financing becomes more negative during the

The order of presentation of activities on the statement of cash flows is

The statement of cash flows will not provide insight into

Which of the following transactions does not affect cash during a period?

If a loss of $108,000 is realized when selling (for cash) a building having a book value of $800,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

The payment of a cash dividend would be classified as a(n)