Question 1

The receipt of dividends from long-term investments in stock is classified as a cash inflow from investing activities.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) added to net income. 
B) deducted from net income. 
C) ignored because it does not affect cash. 
D) not reported on a statement of cash flows. 
A) added to net income. 
B) deducted from net income. 
C) ignored because it does not affect cash. 
D) not reported on a statement of cash flows.

Question 4

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

Accepted Answer

A) the adjusted trial balance. 
B) the current period's balance sheet. 
C) a comparative balance sheet. 
D) a comparative income statement. 
A) the adjusted trial balance. 
B) the current period's balance sheet. 
C) a comparative balance sheet. 
D) a comparative income statement.

Question 5

During the year, Income Tax Expense amounted to $30,000 and Income Taxes Payable increased by $4,000; therefore, the cash paid for income taxes was $26,000.

Accepted Answer

A) True 
 B)False

Question 6

Analysis of the changes in all of the noncash balance sheet accounts will explain the change in the cash account.

Accepted Answer

A) True 
 B)False

Question 7

A primary objective of the statement of cash flows is to show the income or loss on investing and financing transactions.

Accepted Answer

A) True 
 B)False

Question 8

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

Question 9

Which of the following steps is not required in preparing the statement of cash flows?

Accepted Answer

A) Determine the net change in cash. 
B) Determine the net cash provided by operating activities. 
C) Determine cash from investing and financing activities. 
D) Determine the change in current assets. 
A) Determine the net change in cash. 
B) Determine the net cash provided by operating activities. 
C) Determine cash from investing and financing activities. 
D) Determine the change in current assets.

Question 10

The acquisition of a building by issuing bonds would be considered an investing and financing activity that did not affect cash.

Accepted Answer

A) True 
 B)False

Question 11

Indicate where the event purchase of land and a building with a mortgage would appear, if at all, on the indirect 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 12

The net income reported on the income statement for the current year was $220,000.Depreciation recorded on plant assets was $35,000.Accounts receivable and inventories increased by $2,000 and $8,000, respectively.Prepaid expenses and accounts payable decreased by $2,000 and $12,000 respectively.How much cash was provided by operating activities?

Accepted Answer

A) $200,000 
B) $235,000 
C) $220,000 
D) $255,000 
A) $200,000 
B) $235,000 
C) $220,000 
D) $255,000

Question 13

The following data are available for Two-off Company. $$\begin{array} { l r } 
\text { Increase in accounts payable } & \$ 120,000 \
\text { Increase in bonds payable } & 300,000 \
\text { Sale of investments } & 150,000 \
\text { Issuance of common stock } & 160,000 \
\text { Payment of cash dividends } & 90,000
\end{array}$$ Net cash provided by financing activities is:

Accepted Answer

A) $180,000. 
B) $370,000. 
C) $360,000. 
D) $420,000. 
A) $180,000. 
B) $370,000. 
C) $360,000. 
D) $420,000.

Question 14

Squeeze Company reports the following: $$\begin{array} { l c c } 
& \text { End of Year } & \text { Beginning of Year } \
\text { Inventory } & \$ 25,000 & \$ 42,000 \
\text { Accounts Payable } & 22,000 & 12,000
\end{array}$$ If cost of goods sold for the year is $220,000, the amount of cash paid to suppliers is

Accepted Answer

A) $227,000. 
B) $205,000. 
C) $193,000. 
D) $247,000. 
A) $227,000. 
B) $205,000. 
C) $193,000. 
D) $247,000.

Question 15

Acquired an investment in IBM stock for cash of $15,000. What is the net cash provided used by investing activities?

Accepted Answer

A) $15,000 
B) $33,000 
C) ($7,000) 
D) $8,000 
A) $15,000 
B) $33,000 
C) ($7,000) 
D) $8,000

Question 16

All major financing and investing activities affect cash.

Accepted Answer

A) True 
 B)False

Question 17

If accounts payable have increased during a period,

Accepted Answer

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

Question 18

Which of the following would not appear in the operating activities section of a statement of cash flows prepared under the direct method?

Accepted Answer

A) Cash receipts from customers 
B) Cash paid for income taxes 
C) Gain on sale of equipment 
D) Cash paid to employees 
A) Cash receipts from customers 
B) Cash paid for income taxes 
C) Gain on sale of equipment 
D) Cash paid to employees

Question 19

Gonzo Company reports a $25,000 increase in inventory and a $12,000 decrease in accounts payable during the year.Cost of Goods Sold for the year was $185,000.Using the direct method of reporting cash flows from operating activities, cash payments made to suppliers were

Accepted Answer

A) $185,000. 
B) $197,000. 
C) $222,000. 
D) $148,000. 
A) $185,000. 
B) $197,000. 
C) $222,000. 
D) $148,000.

Question 20

In preparing a statement of cash flows, the issuance of debt should be reported separately from the retirement of debt.

Accepted Answer

A) True 
 B)False

The receipt of dividends from long-term investments in stock is classified as a cash inflow from investing activities.

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

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

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

During the year, Income Tax Expense amounted to $30,000 and Income Taxes Payable increased by $4,000; therefore, the cash paid for income taxes was $26,000.

Analysis of the changes in all of the noncash balance sheet accounts will explain the change in the cash account.

A primary objective of the statement of cash flows is to show the income or loss on investing and financing transactions.

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

Which of the following steps is not required in preparing the statement of cash flows?

The acquisition of a building by issuing bonds would be considered an investing and financing activity that did not affect cash.

Indicate where the event purchase of land and a building with a mortgage would appear, if at all, on the indirect statement of cash flows.

The following data are available for Two-off Company. Increase in accounts payable \ 120,000 Increase in bonds payable 300,000 Sale of investments 150,000 Issuance of common stock 160,000 Payment of cash dividends 90,000 Net cash provided by financing activities is:

Squeeze Company reports the following: End of Year Beginning of Year Inventory \ 25,000 \ 42,000 Accounts Payable 22,000 12,000 If cost of goods sold for the year is $220,000, the amount of cash paid to suppliers is

Acquired an investment in IBM stock for cash of $15,000. What is the net cash provided used by investing activities?

All major financing and investing activities affect cash.

If accounts payable have increased during a period,

Which of the following would not appear in the operating activities section of a statement of cash flows prepared under the direct method?

Gonzo Company reports a $25,000 increase in inventory and a $12,000 decrease in accounts payable during the year.Cost of Goods Sold for the year was $185,000.Using the direct method of reporting cash flows from operating activities, cash payments made to suppliers were

In preparing a statement of cash flows, the issuance of debt should be reported separately from the retirement of debt.

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

Filters

Exam 13: Financial Analysis: the Big Picture

The receipt of dividends from long-term investments in stock is classified as a cash inflow from investing activities.

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

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

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

During the year, Income Tax Expense amounted to $30,000 and Income Taxes Payable increased by $4,000; therefore, the cash paid for income taxes was $26,000.

Analysis of the changes in all of the noncash balance sheet accounts will explain the change in the cash account.

A primary objective of the statement of cash flows is to show the income or loss on investing and financing transactions.

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

Which of the following steps is not required in preparing the statement of cash flows?

The acquisition of a building by issuing bonds would be considered an investing and financing activity that did not affect cash.

Indicate where the event purchase of land and a building with a mortgage would appear, if at all, on the indirect statement of cash flows.

The following data are available for Two-off Company. Increase in accounts payable \ 120,000 Increase in bonds payable 300,000 Sale of investments 150,000 Issuance of common stock 160,000 Payment of cash dividends 90,000 Net cash provided by financing activities is:

Squeeze Company reports the following: End of Year Beginning of Year Inventory \ 25,000 \ 42,000 Accounts Payable 22,000 12,000 If cost of goods sold for the year is $220,000, the amount of cash paid to suppliers is

Acquired an investment in IBM stock for cash of $15,000. What is the net cash provided used by investing activities?

All major financing and investing activities affect cash.

If accounts payable have increased during a period,

Which of the following would not appear in the operating activities section of a statement of cash flows prepared under the direct method?

Gonzo Company reports a $25,000 increase in inventory and a $12,000 decrease in accounts payable during the year.Cost of Goods Sold for the year was $185,000.Using the direct method of reporting cash flows from operating activities, cash payments made to suppliers were

In preparing a statement of cash flows, the issuance of debt should be reported separately from the retirement of debt.

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

Filters