Question 1

When equipment is sold for cash, the amount received is reflected as a cash

Accepted Answer

A) inflow in the operating section. 
B) inflow in the financing section. 
C) inflow in the investing section. 
D) outflow in the operating section. 
A) inflow in the operating section. 
B) inflow in the financing section. 
C) inflow in the investing section. 
D) outflow in the operating section.

Question 2

Under IFRS, bank overdrafts are classified as

Accepted Answer

A) operating activities. 
B) investing activities. 
C) financing activities. 
D) cash and cash equivalents. 
A) operating activities. 
B) investing activities. 
C) financing activities. 
D) cash and cash equivalents.

Question 3

Accounts receivable arising from sales to customers amounted to $35,000 and $40,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $223,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is

Accepted Answer

A) $223,000. 
B) $228,000. 
C) $258,000. 
D) $218,000. 
A) $223,000. 
B) $228,000. 
C) $258,000. 
D) $218,000.

Question 4

During the introductory phase, cash from operations and cash from investing activities are expected to be negative.

Accepted Answer

A) True 
 B)False

Question 5

The measurement of free cash flow provides additional insight regarding a company's cash-generating ability.

Accepted Answer

A) True 
 B)False

Question 6

Westwind Corporation shows income tax expense of $270,000. There has been a $30,000 decrease in federal income taxes payable and a $42,000 increase in state income taxes payable during the year. Using the direct method of reporting cash flows from operating activities, what was Westwind 's cash payment for income taxes?

Accepted Answer

A) $270,000. 
B) $258,000. 
C) $198,000. 
D) $342,000. 
A) $270,000. 
B) $258,000. 
C) $198,000. 
D) $342,000.

Question 7

During the decline phase, cash from investing activities may be negative while cash from financing activities may be positive as the company issues new stock or debt.

Accepted Answer

A) True 
 B)False

Question 8

Anjili Company had credit sales of $1,600,000. The beginning accounts receivable balance was $165,000 and the ending accounts receivable balance was $280,000. Using the direct method of reporting cash flows from operating activities, what were the cash collections from customers during the period?

Accepted Answer

A) $1,815,000. 
B) $1,600,000. 
C) $1,485,000. 
D) $1,765,000. 
A) $1,815,000. 
B) $1,600,000. 
C) $1,485,000. 
D) $1,765,000.

Question 9

A company had net income of $282,000. Depreciation expense is $26,000. During the year, accounts receivable and inventory increased $15,000 and $40,000, respectively. Prepaid expenses and accounts payable decreased $2,000 and $14,000, respectively. There was also a loss on the sale of equipment of $17,000. How much cash was provided by operating activities?

Accepted Answer

A) $258,000. 
B) $241,000. 
C) $318,000. 
D) $339,000. 
A) $258,000. 
B) $241,000. 
C) $318,000. 
D) $339,000.

Question 10

Which of the following is the first step in preparing the statement of cash flows?

Accepted Answer

A) Determine the net cash provided by operating activities. 
B) Determine the net income. 
C) Determine net cash provided by investing and financing activities. 
D) Determine the net increase (decrease) in cash. 
A) Determine the net cash provided by operating activities. 
B) Determine the net income. 
C) Determine net cash provided by investing and financing activities. 
D) Determine the net increase (decrease) in cash.

Question 11

The information in the following table is from the statement of cash flows for a company at four different points in time (Period 1, Period 2, Period 3, and Period 4). Negative values are presented in parentheses. $\begin{array}{|l|r|c|c|c|}
\hline & \text { Period 1 } & \text { Period 2 } & \text { Period 3 } & \text { Period 4 } \
\hline \text { Cash provided by operations } & \$(180,000) & \$ 90,000 & \$ 360,000 & \$ 50,000 \\hline \text { Cash provided by investing } & (300,000) & 75,000 & 90,000 & (120,000) \
\hline \text { Cash provided by financing } & 290,000 & (220,000) & (\$ 170,000) & \$ 420,000 \
\hline \text { Net income } & (120,000) & 30,000 & 300,000 & (15,000) \
\hline
\end{array}$ Based on this information, which of the following answers most likely corresponds with the introductory phase, growth phase, maturity phase, or decline phase?

Accepted Answer

A) Period 2, Period 1, Period 3, Period 4. 
B) Period 1, Period 4, Period 3, Period 2. 
C) Period 3, Period 4, Period 1, Period 2. 
D) Period 4, Period 3, Period 2, Period 1. 
A) Period 2, Period 1, Period 3, Period 4. 
B) Period 1, Period 4, Period 3, Period 2. 
C) Period 3, Period 4, Period 1, Period 2. 
D) Period 4, Period 3, Period 2, Period 1.

Question 12

On the statement of cash flows using the indirect method, patent amortization expense will

Accepted Answer

A) be added to net income in the operating section. 
B) be deducted from net income in the operating section. 
C) appear as an inflow of cash in the investing section. 
D) appear as an outflow of cash in the investing section. 
A) be added to net income in the operating section. 
B) be deducted from net income in the operating section. 
C) appear as an inflow of cash in the investing section. 
D) appear as an outflow of cash in the investing section.

Question 13

The indirect and direct methods of preparing the statement of cash flows are identical except for the

Accepted Answer

A) significant noncash activity section. 
B) operating activities section. 
C) investing activities section. 
D) financing activities section. 
A) significant noncash activity section. 
B) operating activities section. 
C) investing activities section. 
D) financing activities section.

Question 14

Which of the following adjustments to convert net income to net cash provided by operating activities is not added to net income?

Accepted Answer

A) Gain on Disposal of Equipment. 
B) Depreciation Expense. 
C) Patent Amortization Expense. 
D) Depletion Expense. 
A) Gain on Disposal of Equipment. 
B) Depreciation Expense. 
C) Patent Amortization Expense. 
D) Depletion Expense.

Question 15

Zoum Corporation had the following transactions during 2017:
1.	Issued $250,000 of par value common stock for cash.
2.	Recorded and paid wages expense of $120,000. 
3.	Acquired land by issuing common stock of par value $1,000,000.
4.	Declared and paid a cash dividend of $20,000. 
5.	Sold a long-term investment (cost $6,000) for cash of $6,000. 
6.	Recorded cash sales of $800,000.
7.	Bought inventory for cash of $320,000.
8.	Acquired an investment in Zynga stock for cash of $42,000.
9.	Converted bonds payable to common stock in the amount of $1,000,000.
10.	Repaid a 6-year note payable in the amount of $440,000.
What is the net cash provided by investing activities?

Accepted Answer

A) $864,000. 
B) $424,000 
C) ($36,000). 
D) ($136,000). 
A) $864,000. 
B) $424,000 
C) ($36,000). 
D) ($136,000).

Question 16

A company would be expected to generate small amounts of cash from operations during the

Accepted Answer

A) introductory phase. 
B) growth phase. 
C) maturity phase. 
D) decline phase. 
A) introductory phase. 
B) growth phase. 
C) maturity phase. 
D) decline phase.

Question 17

Cash generated from operations exceeds investing needs, and the company can begin retiring debt during the

Accepted Answer

A) introductory phase. 
B) growth phase. 
C) maturity phase. 
D) decline phase. 
A) introductory phase. 
B) growth phase. 
C) maturity phase. 
D) decline phase.

Question 18

The information to prepare the statement of cash flows comes from all of the following sources except

Accepted Answer

A) comparative balance sheets. 
B) additional transaction data about cash provided or used during the period. 
C) adjusted trial balance. 
D) current income statement. 
A) comparative balance sheets. 
B) additional transaction data about cash provided or used during the period. 
C) adjusted trial balance. 
D) current income statement.

Question 19

Assume that the Quinn Corporation uses the indirect method to depict cash flows. Indicate where, if at all, interest paid on a note would be reported on the statement of cash flows.

Accepted Answer

A) Operating activities section. 
B) Investing activities section. 
C) Financing activities section. 
D) Does not represent a cash flow. 
A) Operating activities section. 
B) Investing activities section. 
C) Financing activities section. 
D) Does not represent a cash flow.

Question 20

Which one of the following items is not necessary in preparing a statement of cash flows?

Accepted Answer

A) Determine the change in cash. 
B) Determine the cash provided by operations. 
C) Determine cash from financing and investing activities. 
D) Determine the cash in each of the bank accounts. 
A) Determine the change in cash. 
B) Determine the cash provided by operations. 
C) Determine cash from financing and investing activities. 
D) Determine the cash in each of the bank accounts.

When equipment is sold for cash, the amount received is reflected as a cash

Under IFRS, bank overdrafts are classified as

During the introductory phase, cash from operations and cash from investing activities are expected to be negative.

The measurement of free cash flow provides additional insight regarding a company's cash-generating ability.

During the decline phase, cash from investing activities may be negative while cash from financing activities may be positive as the company issues new stock or debt.

Anjili Company had credit sales of $1,600,000. The beginning accounts receivable balance was $165,000 and the ending accounts receivable balance was $280,000. Using the direct method of reporting cash flows from operating activities, what were the cash collections from customers during the period?

Which of the following is the first step in preparing the statement of cash flows?

On the statement of cash flows using the indirect method, patent amortization expense will

The indirect and direct methods of preparing the statement of cash flows are identical except for the

Which of the following adjustments to convert net income to net cash provided by operating activities is not added to net income?

A company would be expected to generate small amounts of cash from operations during the

Cash generated from operations exceeds investing needs, and the company can begin retiring debt during the

The information to prepare the statement of cash flows comes from all of the following sources except

Assume that the Quinn Corporation uses the indirect method to depict cash flows. Indicate where, if at all, interest paid on a note would be reported on the statement of cash flows.

Which one of the following items is not necessary in preparing a statement of cash flows?

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Financial Analysis: The Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters

Exam 11: Statement of Cash Flows

When equipment is sold for cash, the amount received is reflected as a cash

Under IFRS, bank overdrafts are classified as

During the introductory phase, cash from operations and cash from investing activities are expected to be negative.

The measurement of free cash flow provides additional insight regarding a company's cash-generating ability.

During the decline phase, cash from investing activities may be negative while cash from financing activities may be positive as the company issues new stock or debt.

Anjili Company had credit sales of $1,600,000. The beginning accounts receivable balance was $165,000 and the ending accounts receivable balance was $280,000. Using the direct method of reporting cash flows from operating activities, what were the cash collections from customers during the period?

Which of the following is the first step in preparing the statement of cash flows?

On the statement of cash flows using the indirect method, patent amortization expense will

The indirect and direct methods of preparing the statement of cash flows are identical except for the

Which of the following adjustments to convert net income to net cash provided by operating activities is not added to net income?

A company would be expected to generate small amounts of cash from operations during the

Cash generated from operations exceeds investing needs, and the company can begin retiring debt during the

The information to prepare the statement of cash flows comes from all of the following sources except

Assume that the Quinn Corporation uses the indirect method to depict cash flows. Indicate where, if at all, interest paid on a note would be reported on the statement of cash flows.

Which one of the following items is not necessary in preparing a statement of cash flows?

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Financial Analysis: The Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters