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

Investing activities include

Accepted Answer

A) collecting cash on loans made. 
B) obtaining cash from creditors. 
C) obtaining capital from owners. 
D) repaying money previously borrowed. 
A) collecting cash on loans made. 
B) obtaining cash from creditors. 
C) obtaining capital from owners. 
D) repaying money previously borrowed.

Question 3

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 4

All major financing and investing activities affect cash.

Accepted Answer

A) True 
 B)False

Question 5

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 6

The third (final) step in preparing the statement of cash flows is to

Accepted Answer

A) analyze changes in noncurrent asset and liability accounts. 
B) compare the net change in cash with the change in the cash account reported on the balance sheet. 
C) determine net cash provided by operating activities. 
D) list the noncash activities. 
A) analyze changes in noncurrent asset and liability accounts. 
B) compare the net change in cash with the change in the cash account reported on the balance sheet. 
C) determine net cash provided by operating activities. 
D) list the noncash activities.

Question 7

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 Marke 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 8

If a loss of $25,000 is incurred in selling (for cash) office equipment having a book value of $90,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

Accepted Answer

A) $65,000. 
B) $90,000. 
C) $115,000. 
D) $25,000. 
A) $65,000. 
B) $90,000. 
C) $115,000. 
D) $25,000.

Question 9

Financial statement readers can determine future investing and financing transactions by examining a company's statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 10

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 11

Using the indirect method, patent amortization expense for the period

Accepted Answer

A) is deducted from net income. 
B) causes cash to increase. 
C) causes cash to decrease. 
D) is added to net income. 
A) is deducted from net income. 
B) causes cash to increase. 
C) causes cash to decrease. 
D) is added to net income.

Question 12

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 13

Squeeze Company reports the following:   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 14

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 15

The reconciling entry for depreciation expense in a worksheet is a credit to Accumulated Depreciation and a debit to Operating-Depreciation Expense.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following items does not appear in the statement of cash flows under the direct method?

Accepted Answer

A) Cash payments to suppliers 
B) Cash collections from customers 
C) Depreciation Expense 
D) Cash from the sale of equipment 
A) Cash payments to suppliers 
B) Cash collections from customers 
C) Depreciation Expense 
D) Cash from the sale of equipment

Question 17

The statement of cash flows classifies cash receipts and payments as operating, nonoperating, financial, and extraordinary activities.

Accepted Answer

A) True 
 B)False

Question 18

A measure that describes the cash remaining from operations after adjustment for capital expenditures and dividends is

Accepted Answer

A) adjusted cash from operations. 
B) cash provided by operations. 
C) free cash flow. 
D) net cash provided by operating activities. 
A) adjusted cash from operations. 
B) cash provided by operations. 
C) free cash flow. 
D) net cash provided by operating activities.

Question 19

Beane Corporation shows income tax expense of $82,000. There has been a $6,000 decrease in federal income taxes payable and a $7,000 increase in state income taxes payable during the year. What was Beane's cash payment for income taxes?

Accepted Answer

A) $82,000 
B) $81,000 
C) $76,000 
D) $95,000 
A) $82,000 
B) $81,000 
C) $76,000 
D) $95,000

Question 20

The sale of land for cash would be classified as a cash inflow from an investing activity.

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.

Investing activities include

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.

All major financing and investing activities affect cash.

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

The third (final) step in preparing the statement of cash flows is to

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 Marke receive from its customers during the year?

If a loss of $25,000 is incurred in selling (for cash) office equipment having a book value of $90,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

Financial statement readers can determine future investing and financing transactions by examining a company's statement of cash flows.

Significant noncash transactions would not include

Using the indirect method, patent amortization expense for the period

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

Squeeze Company reports the following: If cost of goods sold for the year is $220,000, the amount of cash paid to suppliers is

The reconciling entry for depreciation expense in a worksheet is a credit to Accumulated Depreciation and a debit to Operating-Depreciation Expense.

Which of the following items does not appear in the statement of cash flows under the direct method?

The statement of cash flows classifies cash receipts and payments as operating, nonoperating, financial, and extraordinary activities.

A measure that describes the cash remaining from operations after adjustment for capital expenditures and dividends is

Beane Corporation shows income tax expense of $82,000. There has been a $6,000 decrease in federal income taxes payable and a $7,000 increase in state income taxes payable during the year. What was Beane's cash payment for income taxes?

The sale of land for cash would be classified as a cash inflow from an investing activity.

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

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Exam 13: Statement of Cash Flows

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

Investing activities include

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.

All major financing and investing activities affect cash.

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

The third (final) step in preparing the statement of cash flows is to

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 Marke receive from its customers during the year?

If a loss of $25,000 is incurred in selling (for cash) office equipment having a book value of $90,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

Financial statement readers can determine future investing and financing transactions by examining a company's statement of cash flows.

Significant noncash transactions would not include

Using the indirect method, patent amortization expense for the period

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

Squeeze Company reports the following: If cost of goods sold for the year is $220,000, the amount of cash paid to suppliers is

The reconciling entry for depreciation expense in a worksheet is a credit to Accumulated Depreciation and a debit to Operating-Depreciation Expense.

Which of the following items does not appear in the statement of cash flows under the direct method?

The statement of cash flows classifies cash receipts and payments as operating, nonoperating, financial, and extraordinary activities.

A measure that describes the cash remaining from operations after adjustment for capital expenditures and dividends is

Beane Corporation shows income tax expense of $82,000. There has been a $6,000 decrease in federal income taxes payable and a $7,000 increase in state income taxes payable during the year. What was Beane's cash payment for income taxes?

The sale of land for cash would be classified as a cash inflow from an investing activity.

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