Question 1

The statement of cash flows will not report the

Accepted Answer

A) amount of checks outstanding at the end of the period. 
B) sources of cash in the current period. 
C) uses of cash in the current period. 
D) change in the cash balance for the current period. 
A) amount of checks outstanding at the end of the period. 
B) sources of cash in the current period. 
C) uses of cash in the current period. 
D) change in the cash balance for the current period.

Question 2

Which of the following would not be needed to determine net cash provided by operating activities?

Accepted Answer

A) Depreciation expense 
B) Change in accounts receivable 
C) Payment of cash dividends 
D) Change in prepaid expenses 
A) Depreciation expense 
B) Change in accounts receivable 
C) Payment of cash dividends 
D) Change in prepaid expenses

Question 3

If a company has both an inflow and outflow of cash related to property, plant, and equipment, the

Accepted Answer

A) two cash effects can be netted and presented as one item in the investing activities section. 
B) cash inflow and cash outflow should be reported separately in the investing activities section. 
C) two cash effects can be netted and presented as one item in the financing activities section. 
D) cash inflow and cash outflow should be reported separately in the financing activities section. 
A) two cash effects can be netted and presented as one item in the investing activities section. 
B) cash inflow and cash outflow should be reported separately in the investing activities section. 
C) two cash effects can be netted and presented as one item in the financing activities section. 
D) cash inflow and cash outflow should be reported separately in the financing activities section.

Question 4

Lending money and collecting the loans are

Accepted Answer

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

Question 5

Net income for the period.

Accepted Answer

A) 1 
B) 2 
C) Neither 1 nor 2. 
D) Both 1 and 2. 
A) 1 
B) 2 
C) Neither 1 nor 2. 
D) Both 1 and 2.

Question 6

Which one of the following affects cash during a period?

Accepted Answer

A) Recording depreciation expense 
B) Declaration of a cash dividend 
C) Write-off of an uncollectible account receivable 
D) Payment of an accounts payable 
A) Recording depreciation expense 
B) Declaration of a cash dividend 
C) Write-off of an uncollectible account receivable 
D) Payment of an accounts payable

Question 7

A company had net income of $210,000.Depreciation expense is $27,000.During the year, Accounts Receivable and Inventory increased $17,000 and $42,000, respectively.Prepaid Expenses and Accounts Payable decreased $5,000 and $6,000, respectively.There was also a loss on the sale of equipment of $2,000.How much cash was provided by operating activities?

Accepted Answer

A) $175,000 
B) $179,000 
C) $241,000 
D) $271,000 
A) $175,000 
B) $179,000 
C) $241,000 
D) $271,000

Question 8

Marke Inc.had cash sales of $400,000 and credit sales of $1,150,000.The accounts receivable balance increased $30,000 during the year.How much cash did Hark receive from its customers during the year?

Accepted Answer

A) $1,520,000 
B) $1,120,000 
C) $1,550,000 
D) $780,000 
A) $1,520,000 
B) $1,120,000 
C) $1,550,000 
D) $780,000

Question 9

Which of the following transactions would not be classified as a financing activity?

Accepted Answer

A) Purchase of treasury stock 
B) Payment of dividends 
C) Issuance of bonds at a discount 
D) Purchase of a long-term investment in bonds 
A) Purchase of treasury stock 
B) Payment of dividends 
C) Issuance of bonds at a discount 
D) Purchase of a long-term investment in bonds

Question 10

During 2017, Harvey Industries reported cash provided by operations of $670,000, cash used in investing of $1,039,000, and cash used in financing of $145,000.In addition, cash spent for fixed assets during the period was $404,000.No dividends were paid.Based on this information, what was Harvey's free cash flow?

Accepted Answer

A) ($369,000) 
B) $1,450,000 
C) $266,000 
D) ($918,000) 
A) ($369,000) 
B) $1,450,000 
C) $266,000 
D) ($918,000)

Question 11

In Jude Company, land decreased $150,000 because of a cash sale for $150,000, the equipment account increased $60,000 as a result of a cash purchase, and Bonds Payable increased $120,000 from issuance for cash at face value.The net cash provided by investing activities is

Accepted Answer

A) $150,000. 
B) $210,000. 
C) $90,000. 
D) $270,000. 
A) $150,000. 
B) $210,000. 
C) $90,000. 
D) $270,000.

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Cash flow from investing activities is considered the most important category on the statement of cash flows because it is considered the best measure of expected income.

Accepted Answer

A) True 
 B)False

Question 14

Financing activities involve

Accepted Answer

A) lending money to other entities and collecting on those loans. 
B) cash receipts from sales of goods and services. 
C) acquiring and disposing of productive long-lived assets. 
D) long-term liability and owners' equity items. 
A) lending money to other entities and collecting on those loans. 
B) cash receipts from sales of goods and services. 
C) acquiring and disposing of productive long-lived assets. 
D) long-term liability and owners' equity items.

Question 15

The information in a statement of cash flows helps investors and creditors assess the company's ability to pay dividends and meet obligations.

Accepted Answer

A) True 
 B)False

Question 16

In developing the cash flows from operating activities, most companies in the U.S.

Accepted Answer

A) use the direct method. 
B) use the indirect method. 
C) present both the indirect and direct methods in their financial reports. 
D) prepare the operating activities section on the accrual basis. 
A) use the direct method. 
B) use the indirect method. 
C) present both the indirect and direct methods in their financial reports. 
D) prepare the operating activities section on the accrual basis.

Question 17

For external reporting, a company must prepare either an income statement or a statement of cash flows, but not both.

Accepted Answer

A) True 
 B)False

Question 18

Spa Company uses the direct method in determining net cash provided by operating activities.The income statement shows income tax expense $85,000.Income taxes payable were $35,000 at the beginning of the year and $20,000 at the end of the year.Cash payments for income taxes are

Accepted Answer

A) $70,000. 
B) $85,000. 
C) $100,000. 
D) $140,000. 
A) $70,000. 
B) $85,000. 
C) $100,000. 
D) $140,000.

Question 19

Land acquired from the issuance of common stock is reported

Accepted Answer

A) as a financing activity. 
B) as an investing activity. 
C) as an operating activity. 
D) in a separate schedule at the bottom of the statement of cash flows. 
A) as a financing activity. 
B) as an investing activity. 
C) as an operating activity. 
D) in a separate schedule at the bottom of the statement of cash flows.

Question 20

All of the following statements about free cash flow are false except:

Accepted Answer

A) Significant free cash flow indicates less potential to finance new investments. 
B) Free cash flow is most commonly calculated by subtracting capital expenditures from cash provided by operations and then adding cash dividends. 
C) Free cash flow is not reported on the statement of cash flows. 
D) Significant free cash flow indicates less potential to pay additional dividends. 
A) Significant free cash flow indicates less potential to finance new investments. 
B) Free cash flow is most commonly calculated by subtracting capital expenditures from cash provided by operations and then adding cash dividends. 
C) Free cash flow is not reported on the statement of cash flows. 
D) Significant free cash flow indicates less potential to pay additional dividends.

The statement of cash flows will not report the

Which of the following would not be needed to determine net cash provided by operating activities?

If a company has both an inflow and outflow of cash related to property, plant, and equipment, the

Lending money and collecting the loans are

Net income for the period.

Which one of the following affects cash during a period?

Marke Inc.had cash sales of $400,000 and credit sales of $1,150,000.The accounts receivable balance increased $30,000 during the year.How much cash did Hark receive from its customers during the year?

Which of the following transactions would not be classified as a financing activity?

In Jude Company, land decreased $150,000 because of a cash sale for $150,000, the equipment account increased $60,000 as a result of a cash purchase, and Bonds Payable increased $120,000 from issuance for cash at face value.The net cash provided by investing activities is

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

Cash flow from investing activities is considered the most important category on the statement of cash flows because it is considered the best measure of expected income.

Financing activities involve

The information in a statement of cash flows helps investors and creditors assess the company's ability to pay dividends and meet obligations.

In developing the cash flows from operating activities, most companies in the U.S.

For external reporting, a company must prepare either an income statement or a statement of cash flows, but not both.

Spa Company uses the direct method in determining net cash provided by operating activities.The income statement shows income tax expense $85,000.Income taxes payable were $35,000 at the beginning of the year and $20,000 at the end of the year.Cash payments for income taxes are

Land acquired from the issuance of common stock is reported

All of the following statements about free cash flow are false except:

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 statement of cash flows will not report the

Which of the following would not be needed to determine net cash provided by operating activities?

If a company has both an inflow and outflow of cash related to property, plant, and equipment, the

Lending money and collecting the loans are

Net income for the period.

Which one of the following affects cash during a period?

Marke Inc.had cash sales of $400,000 and credit sales of $1,150,000.The accounts receivable balance increased $30,000 during the year.How much cash did Hark receive from its customers during the year?

Which of the following transactions would not be classified as a financing activity?

In Jude Company, land decreased $150,000 because of a cash sale for $150,000, the equipment account increased $60,000 as a result of a cash purchase, and Bonds Payable increased $120,000 from issuance for cash at face value.The net cash provided by investing activities is

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

Cash flow from investing activities is considered the most important category on the statement of cash flows because it is considered the best measure of expected income.

Financing activities involve

The information in a statement of cash flows helps investors and creditors assess the company's ability to pay dividends and meet obligations.

In developing the cash flows from operating activities, most companies in the U.S.

For external reporting, a company must prepare either an income statement or a statement of cash flows, but not both.

Spa Company uses the direct method in determining net cash provided by operating activities.The income statement shows income tax expense $85,000.Income taxes payable were $35,000 at the beginning of the year and $20,000 at the end of the year.Cash payments for income taxes are

Land acquired from the issuance of common stock is reported

All of the following statements about free cash flow are false except:

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