Question 1

Cash receipts from interest and dividends are classified as

Accepted Answer

A) financing activities. 
B) investing activities. 
C) operating activities. 
D) either financing or investing activities. 
A) financing activities. 
B) investing activities. 
C) operating activities. 
D) either financing or investing activities.

Question 2

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 3

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 4

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 5

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 6

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

Question 7

Tomas Pest Control Products has the following information available:   What is Tomas' free cash flow?

Accepted Answer

A) $27,000 
B) $23,000 
C) $21,000 
D) $10,000 
A) $27,000 
B) $23,000 
C) $21,000 
D) $10,000

Question 8

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 9

The information in a statement of cash flows will not help investors to assess the entity's ability to

Accepted Answer

A) generate future cash flows. 
B) obtain favorable borrowing terms at a bank. 
C) pay dividends. 
D) pay its obligations when they become due. 
A) generate future cash flows. 
B) obtain favorable borrowing terms at a bank. 
C) pay dividends. 
D) pay its obligations when they become due.

Question 10

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.

Question 11

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 12

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 13

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 14

The statement of cash flows is prepared from all of the following except

Accepted Answer

A) the adjusted trial balance. 
B) comparative balance sheets. 
C) selected transaction data. 
D) the current income statement. 
A) the adjusted trial balance. 
B) comparative balance sheets. 
C) selected transaction data. 
D) the current income statement.

Question 15

Kanet Company issued common stock for proceeds of $386,000 during 2014. The company paid dividends of $80,000 and issued a long-term note payable for $95,000 in exchange for equipment during the year. The company also purchased treasury stock that had a cost of $15,000. The financing section of the statement of cash flows will report net cash inflows of

Accepted Answer

A) $291,000. 
B) $481,000. 
C) $306,000. 
D) $371,000. 
A) $291,000. 
B) $481,000. 
C) $306,000. 
D) $371,000.

Question 16

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 17

LRRP Company had credit sales of $650,000. The beginning accounts receivable balance was $15,000 and the ending accounts receivable balance was $140,000. What were the cash collections from customers during the period?

Accepted Answer

A) $775,000 
B) $650,000 
C) $525,000 
D) $665,000 
A) $775,000 
B) $650,000 
C) $525,000 
D) $665,000

Question 18

A loss on sale of equipment is added to net income in determining cash provided by operations under the indirect method.

Accepted Answer

A) True 
 B)False

Question 19

The payment of interest on bonds payable is classified as a cash outflow from operating activities.

Accepted Answer

A) True 
 B)False

Question 20

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.

Cash receipts from interest and dividends are classified as

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:

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

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

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

Tomas Pest Control Products has the following information available: What is Tomas' free cash flow?

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

The information in a statement of cash flows will not help investors to assess the entity's ability to

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

Free cash flow equals cash provided by

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

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

The statement of cash flows is prepared from all of the following except

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

LRRP Company had credit sales of $650,000. The beginning accounts receivable balance was $15,000 and the ending accounts receivable balance was $140,000. What were the cash collections from customers during the period?

A loss on sale of equipment is added to net income in determining cash provided by operations under the indirect method.

The payment of interest on bonds payable is classified as a cash outflow from operating activities.

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

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions, Dividends, and Retained Earnings

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Financial Statement Analysis

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Exam 13: Statement of Cash Flows

Cash receipts from interest and dividends are classified as

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:

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

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

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

Tomas Pest Control Products has the following information available: What is Tomas' free cash flow?

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

The information in a statement of cash flows will not help investors to assess the entity's ability to

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

Free cash flow equals cash provided by

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

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

The statement of cash flows is prepared from all of the following except

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

LRRP Company had credit sales of $650,000. The beginning accounts receivable balance was $15,000 and the ending accounts receivable balance was $140,000. What were the cash collections from customers during the period?

A loss on sale of equipment is added to net income in determining cash provided by operations under the indirect method.

The payment of interest on bonds payable is classified as a cash outflow from operating activities.

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

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions, Dividends, and Retained Earnings

Investments

Financial Statement Analysis

Filters