Question 1

When using the Spreadsheet work sheet) method to analyze noncash accounts, it is best to start with

Accepted Answer

A)  cash 
B)  net income 
C)  retained earnings 
D)  revenue 
A)  cash 
B)  net income 
C)  retained earnings 
D)  revenue

Question 2

Which of the following represents an inflow of cash and therefore would be reported on the statement of cash flows?

Accepted Answer

A)  retirement of bond payable 
B)  acquisition of treasury stock 
C)  declaration of stock dividends 
D)  issuance of long-term debt 
A)  retirement of bond payable 
B)  acquisition of treasury stock 
C)  declaration of stock dividends 
D)  issuance of long-term debt

Question 3

On the statement of cash flows, the cash flows from operating activities section would include

Accepted Answer

A)  receipts from the issuance of capital stock 
B)  payment for interest on short-term notes payable 
C)  payments for the purchase of investments 
D)  payments for cash dividends 
A)  receipts from the issuance of capital stock 
B)  payment for interest on short-term notes payable 
C)  payments for the purchase of investments 
D)  payments for cash dividends

Question 4

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

Accepted Answer

A)  a gain on the sale of land 
B)  a decrease in accounts payable 
C)  an increase in accrued liabilities 
D)  dividends paid on common stock 
A)  a gain on the sale of land 
B)  a decrease in accounts payable 
C)  an increase in accrued liabilities 
D)  dividends paid on common stock

Question 5

Which of the following would not be classified as an operating activity?

Accepted Answer

A)  interest expense 
B)  income taxes 
C)  payment of dividends 
D)  selling expenses 
A)  interest expense 
B)  income taxes 
C)  payment of dividends 
D)  selling expenses

Question 6

The statement of cash flows is not useful for

Accepted Answer

A)  planning future investing and financing activities 
B)  determining a company's ability to pay its debts 
C)  determining a company's ability to pay dividends 
D)  calculating the net worth of a company 
A)  planning future investing and financing activities 
B)  determining a company's ability to pay its debts 
C)  determining a company's ability to pay dividends 
D)  calculating the net worth of a company

Question 7

Fortune Corporation's comparative balance sheet for current assets and liabilities was as follows:   Adjust Year 2 net income of $65,000 for changes in operating assets and liabilities to arrive at cash flows from operating activities using the indirect method.

Accepted Answer

The answer of Fortune Corporation's comparative balance sheet for current...

Question 8

Under the indirect method, expenses that do not affect cash are added to net income in the operating activities section of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 9

Under the direct method of reporting cash flows from operations, the primary source of cash is cash received from customers.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method?

Accepted Answer

A)  a decrease in inventory 
B)  a decrease in accounts payable 
C)  preferred dividends declared and paid 
D)  a decrease in accounts receivable 
A)  a decrease in inventory 
B)  a decrease in accounts payable 
C)  preferred dividends declared and paid 
D)  a decrease in accounts receivable

Question 11

The last item on the statement of cash flows prior to the schedule of noncash investing and financing activities reports

Accepted Answer

A)  the increase or decrease in cash 
B)  cash at the end of the year 
C)  net cash flow from investing activities 
D)  net cash flow from financing activities 
A)  the increase or decrease in cash 
B)  cash at the end of the year 
C)  net cash flow from investing activities 
D)  net cash flow from financing activities

Question 12

Financing activities include

Accepted Answer

A)  lending money 
B)  acquiring investments 
C)  issuing debt 
D)  acquiring long-lived assets 
A)  lending money 
B)  acquiring investments 
C)  issuing debt 
D)  acquiring long-lived assets

Question 13

Land costing $140,000 was sold for $173,000 cash. The gain on the sale was reported on the income statement as other income. On the statement of cash flows, what amount should be reported as an investing activity from the sale of land?

Accepted Answer

A)  $173,000 
B)  $140,000 
C)  $313,000 
D)  $33,000 
A)  $173,000 
B)  $140,000 
C)  $313,000 
D)  $33,000

Question 14

On the statement of cash flows, the cash flows from financing activities section would include

Accepted Answer

A)  receipts from the sale of investments 
B)  payments for the acquisition of investments 
C)  receipts from a note receivable 
D)  receipts from the issuance of capital stock 
A)  receipts from the sale of investments 
B)  payments for the acquisition of investments 
C)  receipts from a note receivable 
D)  receipts from the issuance of capital stock

Question 15

Income tax was $175,000 for the year. Income tax payable was $30,000 and $40,000 at the beginning and end of the year, respectively. Cash payments for income tax reported on the statement of cash flows using the direct method is

Accepted Answer

A)  $175,000 
B)  $165,000 
C)  $205,000 
D)  $215,000 
A)  $175,000 
B)  $165,000 
C)  $205,000 
D)  $215,000

Question 16

Sales reported on the income statement were $690,000. The accounts receivable balance declined $39,000 over the year. Determine the amount of cash received from customers.

Accepted Answer

@#IMG-DLM& Sales
$690,000
Add

Question 17

Using the indirect method, if land costing $85,000 was sold for $145,000, the amount reported in the financing activities section of the statement of cash flows would be $85,000.

Accepted Answer

A) True 
 B)False

Question 18

When using the spreadsheet work sheet) method to analyzing noncash accounts, no order of analysis is required, but it is more efficient to start with Retained Earnings and proceed upward in the account listing.

Accepted Answer

A) True 
 B)False

Question 19

To arrive at cash flows from operations, it is necessary to convert the income statement from an accrual basis to the cash basis of accounting.

Accepted Answer

A) True 
 B)False

Question 20

On the statement of cash flows, a $7,500 gain on the sale of fixed assets would be

Accepted Answer

A)  added to net income in converting the net income reported on the income statement to cash flows from operating activities 
B)  deducted from net income in converting the net income reported on the income statement to cash flows from operating activities 
C)  added to dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends 
D)  deducted from dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends 
A)  added to net income in converting the net income reported on the income statement to cash flows from operating activities 
B)  deducted from net income in converting the net income reported on the income statement to cash flows from operating activities 
C)  added to dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends 
D)  deducted from dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends

Exam 14: Statement of Cash Flows

When using the Spreadsheet work sheet) method to analyze noncash accounts, it is best to start with

Which of the following represents an inflow of cash and therefore would be reported on the statement of cash flows?

On the statement of cash flows, the cash flows from operating activities section would include

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

Which of the following would not be classified as an operating activity?

The statement of cash flows is not useful for

Fortune Corporation's comparative balance sheet for current assets and liabilities was as follows: Adjust Year 2 net income of $65,000 for changes in operating assets and liabilities to arrive at cash flows from operating activities using the indirect method.

Under the indirect method, expenses that do not affect cash are added to net income in the operating activities section of the statement of cash flows.

Under the direct method of reporting cash flows from operations, the primary source of cash is cash received from customers.

Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method?

The last item on the statement of cash flows prior to the schedule of noncash investing and financing activities reports

Financing activities include

Land costing $140,000 was sold for $173,000 cash. The gain on the sale was reported on the income statement as other income. On the statement of cash flows, what amount should be reported as an investing activity from the sale of land?

On the statement of cash flows, the cash flows from financing activities section would include

Income tax was $175,000 for the year. Income tax payable was $30,000 and $40,000 at the beginning and end of the year, respectively. Cash payments for income tax reported on the statement of cash flows using the direct method is

Sales reported on the income statement were $690,000. The accounts receivable balance declined $39,000 over the year. Determine the amount of cash received from customers.

Using the indirect method, if land costing $85,000 was sold for $145,000, the amount reported in the financing activities section of the statement of cash flows would be $85,000.

When using the spreadsheet work sheet) method to analyzing noncash accounts, no order of analysis is required, but it is more efficient to start with Retained Earnings and proceed upward in the account listing.

To arrive at cash flows from operations, it is necessary to convert the income statement from an accrual basis to the cash basis of accounting.

On the statement of cash flows, a $7,500 gain on the sale of fixed assets would be

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

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