Question 1

In converting net income to net cash provided by operating activities, under the indirect method:

Accepted Answer

A) decreases in accounts receivable and increases in prepaid expenses are added. 
B) decreases in inventory and increases in accrued liabilities are added. 
C) decreases in accounts payable and decreases in inventory are deducted. 
D) increases in accounts receivable and increases in accrued liabilities are deducted. 
A) decreases in accounts receivable and increases in prepaid expenses are added. 
B) decreases in inventory and increases in accrued liabilities are added. 
C) decreases in accounts payable and decreases in inventory are deducted. 
D) increases in accounts receivable and increases in accrued liabilities are deducted.

Question 2

The cost of goods sold during the year was $183,000.Inventory decreased by $8,000 during the year and accounts payable decreased by $4,000 during the year.Using the direct method of reporting cash flows from operating activities, cash payments for merchandise total

Accepted Answer

A) $187,000. 
B) $179,000. 
C) $171,000. 
D) $195,000. 
A) $187,000. 
B) $179,000. 
C) $171,000. 
D) $195,000.

Question 3

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 all 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 all bank accounts

Question 4

The acquisition of land by issuing common stock is

Accepted Answer

A) a noncash transaction which is not reported in the body of a statement of cash flows. 
B) a cash transaction and would be reported in the body of a statement of cash flows. 
C) a noncash transaction and would be reported in the body of a statement of cash flows. 
D) only reported if the statement of cash flows is prepared using the direct method. 
A) a noncash transaction which is not reported in the body of a statement of cash flows. 
B) a cash transaction and would be reported in the body of a statement of cash flows. 
C) a noncash transaction and would be reported in the body of a statement of cash flows. 
D) only reported if the statement of cash flows is prepared using the direct method.

Question 5

Indicate where the payment of income taxes would appear, if at all, 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 6

Hogan Company uses the direct method in determining net cash provided by operating activities, During the year, operating expenses were $295,000, prepaid expenses increased $23,000, and accrued expenses payable increased $33,000.Cash payments for operating expenses were

Accepted Answer

A) $39,000. 
B) $51,000. 
C) $305,000. 
D) $285,000. 
A) $39,000. 
B) $51,000. 
C) $305,000. 
D) $285,000.

Question 7

The statement of cash flows will not provide insight into

Accepted Answer

A) why dividends were not increased. 
B) whether cash flow is greater than net income. 
C) the exact proceeds of a future bond issue. 
D) how the retirement of debt was accomplished. 
A) why dividends were not increased. 
B) whether cash flow is greater than net income. 
C) the exact proceeds of a future bond issue. 
D) how the retirement of debt was accomplished.

Question 8

Financing activities include the obtaining of cash from issuing debt and repaying the amounts borrowed.

Accepted Answer

A) True 
 B)False

Question 9

Significant noncash transactions would not include

Accepted Answer

A) conversion of bonds into common stock. 
B) asset acquisition through bond issuance. 
C) treasury stock acquisition. 
D) exchange of plant assets. 
A) conversion of bonds into common stock. 
B) asset acquisition through bond issuance. 
C) treasury stock acquisition. 
D) exchange of plant assets.

Question 10

If accounts receivable have increased during the period,

Accepted Answer

A) revenues on an accrual basis are less than revenues on a cash basis. 
B) revenues on an accrual basis are greater than revenues on a cash basis. 
C) revenues on an accrual basis are the same as revenues on a cash basis. 
D) expenses on an accrual basis are greater than expenses on a cash basis. 
A) revenues on an accrual basis are less than revenues on a cash basis. 
B) revenues on an accrual basis are greater than revenues on a cash basis. 
C) revenues on an accrual basis are the same as revenues on a cash basis. 
D) expenses on an accrual basis are greater than expenses on a cash basis.

Question 11

In Alona Company, net income is $285,000.If accounts receivable increased $140,000 and accounts payable decreased $40,000, net cash provided by operating activities using the indirect method is:

Accepted Answer

A) $105,000. 
B) $185,000. 
C) $385,000. 
D) $465,000. 
A) $105,000. 
B) $185,000. 
C) $385,000. 
D) $465,000.

Question 12

Free cash flow equals cash provided by

Accepted Answer

A) operations less capital expenditures and cash dividends. 
B) operations less cash dividends. 
C) investing activities less capital expenditures and cash dividends. 
D) operations less capital expenditures. 
A) operations less capital expenditures and cash dividends. 
B) operations less cash dividends. 
C) investing activities less capital expenditures and cash dividends. 
D) operations less capital expenditures.

Question 13

The change in cash is equal to the change in liabilities less the change in equity plus the change in noncash assets.

Accepted Answer

A) True 
 B)False

Question 14

Acquired an investment in IBM stock for cash of $10,000. What is the net cash provided by financing activities?

Accepted Answer

A) $21,000 
B) $67,000 
C) $28,000 
D) $0 
A) $21,000 
B) $67,000 
C) $28,000 
D) $0

Question 15

In addition to the three basic financial statements, which of the following is also a required financial statement?

Accepted Answer

A) the "Cash Budget" 
B) the Statement of Cash Flows 
C) the Statement of Cash Inflows and Outflows 
D) the "Cash Reconciliation" 
A) the "Cash Budget" 
B) the Statement of Cash Flows 
C) the Statement of Cash Inflows and Outflows 
D) the "Cash Reconciliation"

Question 16

Which of the following would not be an adjustment to net income using the indirect method?

Accepted Answer

A) Depreciation Expense 
B) An increase in Prepaid Insurance 
C) Amortization Expense 
D) An increase in Land 
A) Depreciation Expense 
B) An increase in Prepaid Insurance 
C) Amortization Expense 
D) An increase in Land

Question 17

During 2017, Zuma Company had $150,000 in cash sales and $1,240,000 in credit sales.The accounts receivable balances were $180,000 and $215,000 at December 31, 2016 and 2017, respectively.Using the direct method of reporting cash flows from operating activities, what was the total cash collected from all customers during 2017?

Accepted Answer

A) $1,205,000 
B) $1,425,000 
C) $1,390,000 
D) $1,355,000 
A) $1,205,000 
B) $1,425,000 
C) $1,390,000 
D) $1,355,000

Question 18

The statement of cash flows reports each of the following except

Accepted Answer

A) cash receipts from operating activities. 
B) cash payments from investing activities. 
C) the net change in cash. 
D) cash sales. 
A) cash receipts from operating activities. 
B) cash payments from investing activities. 
C) the net change in cash. 
D) cash sales.

Question 19

The adjusted trial balance is the only item needed to prepare the Statement of Cash Flows.

Accepted Answer

A) True 
 B)False

Question 20

Pare Company reported a net loss of $30,000 for the year ended December 31, 2017.During the year, accounts receivable decreased $15,000, merchandise inventory increased $25,000, accounts payable increased by $30,000, and depreciation expense of $20,000 was recorded.During 2017, operating activities

Accepted Answer

A) used net cash of $10,000. 
B) used net cash of $25,000. 
C) provided net cash of $10,000. 
D) provided net cash of $25,000. 
A) used net cash of $10,000. 
B) used net cash of $25,000. 
C) provided net cash of $10,000. 
D) provided net cash of $25,000.

In converting net income to net cash provided by operating activities, under the indirect method:

The cost of goods sold during the year was $183,000.Inventory decreased by $8,000 during the year and accounts payable decreased by $4,000 during the year.Using the direct method of reporting cash flows from operating activities, cash payments for merchandise total

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

The acquisition of land by issuing common stock is

Indicate where the payment of income taxes would appear, if at all, on the statement of cash flows.

Hogan Company uses the direct method in determining net cash provided by operating activities, During the year, operating expenses were $295,000, prepaid expenses increased $23,000, and accrued expenses payable increased $33,000.Cash payments for operating expenses were

The statement of cash flows will not provide insight into

Financing activities include the obtaining of cash from issuing debt and repaying the amounts borrowed.

Significant noncash transactions would not include

If accounts receivable have increased during the period,

In Alona Company, net income is $285,000.If accounts receivable increased $140,000 and accounts payable decreased $40,000, net cash provided by operating activities using the indirect method is:

Free cash flow equals cash provided by

The change in cash is equal to the change in liabilities less the change in equity plus the change in noncash assets.

Acquired an investment in IBM stock for cash of $10,000. What is the net cash provided by financing activities?

In addition to the three basic financial statements, which of the following is also a required financial statement?

Which of the following would not be an adjustment to net income using the indirect method?

The statement of cash flows reports each of the following except

The adjusted trial balance is the only item needed to prepare the Statement of Cash Flows.

Pare Company reported a net loss of $30,000 for the year ended December 31, 2017.During the year, accounts receivable decreased $15,000, merchandise inventory increased $25,000, accounts payable increased by $30,000, and depreciation expense of $20,000 was recorded.During 2017, operating activities

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

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

Statement of Cash Flows

Managerial Accounting

Time Value of Money

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Exam 13: Financial Analysis: the Big Picture

In converting net income to net cash provided by operating activities, under the indirect method:

The cost of goods sold during the year was $183,000.Inventory decreased by $8,000 during the year and accounts payable decreased by $4,000 during the year.Using the direct method of reporting cash flows from operating activities, cash payments for merchandise total

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

The acquisition of land by issuing common stock is

Indicate where the payment of income taxes would appear, if at all, on the statement of cash flows.

Hogan Company uses the direct method in determining net cash provided by operating activities, During the year, operating expenses were $295,000, prepaid expenses increased $23,000, and accrued expenses payable increased $33,000.Cash payments for operating expenses were

The statement of cash flows will not provide insight into

Financing activities include the obtaining of cash from issuing debt and repaying the amounts borrowed.

Significant noncash transactions would not include

If accounts receivable have increased during the period,

In Alona Company, net income is $285,000.If accounts receivable increased $140,000 and accounts payable decreased $40,000, net cash provided by operating activities using the indirect method is:

Free cash flow equals cash provided by

The change in cash is equal to the change in liabilities less the change in equity plus the change in noncash assets.

Acquired an investment in IBM stock for cash of $10,000. What is the net cash provided by financing activities?

In addition to the three basic financial statements, which of the following is also a required financial statement?

Which of the following would not be an adjustment to net income using the indirect method?

The statement of cash flows reports each of the following except

The adjusted trial balance is the only item needed to prepare the Statement of Cash Flows.

Pare Company reported a net loss of $30,000 for the year ended December 31, 2017.During the year, accounts receivable decreased $15,000, merchandise inventory increased $25,000, accounts payable increased by $30,000, and depreciation expense of $20,000 was recorded.During 2017, operating activities

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

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

Statement of Cash Flows

Managerial Accounting

Time Value of Money

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