Question 1

The objective of the indirect method is to reconcile net income to net cash flow from
_______________________________.

Accepted Answer

operating

Question 2

Parks Company reported an increase of $370,000 in its accounts receivable during the year 2015.The company's statement of cash flows for 2015 reported $1 million of cash received from customers.What amount of net sales must Parks have recorded in 2015?

Accepted Answer

A) $370,000 
B) $1,000,000 
C) $1,370,000 
D) $630,000 
A) $370,000 
B) $1,000,000 
C) $1,370,000 
D) $630,000

Question 3

Which of the following should be classified as an investing activity on the statement of cash flows?

Accepted Answer

A) interest on notes payable 
B) payment to suppliers for inventory 
C) payment of dividends 
D) None of these 
A) interest on notes payable 
B) payment to suppliers for inventory 
C) payment of dividends 
D) None of these

Question 4

The issuance of common stock in exchange for a building would appear both as a cash inflow in the financing activities section of the cash flow statement and also as a cash outflow in the investing activities section.

Accepted Answer

A) True 
 B)False

Question 5

The repurchase of a company's own stock should be reported on the statement of cash flows as an investing activity.

Accepted Answer

A) True 
 B)False

Question 6

At the end of the first year of operations, the balance sheet of West Palm Beach Industries had the following balances: Accounts Receivable, $5,000; Accounts Payable, $6,000; Inventory, $3,000; and Unexpired Insurance, $2,000.The corporation reported net income of $79,000 for the year, including depreciation expense of $5,000, and uses the indirect method of computing net cash flow from operating activities.Based on this information, net cash flow from operating activities is:

Accepted Answer

A) $82,000 
B) $78,000 
C) $80,000 
D) $77,000 
A) $82,000 
B) $78,000 
C) $80,000 
D) $77,000

Question 7

Use the information below for Fargo Corp.for 2015 and 2016 to answer the following question.   At the end of 2016, Fargo issued bonds at par value for $800,000 cash.The proceeds from these bonds were used to retire the $500,000 bond issue outstanding at the end of 2015 before their maturity date).All interest expense was paid in cash during 2016.
How much did Fargo pay to retire the $500,000 bond issue during 2016?

Accepted Answer

A) $485,000 
B) $500,000 
C) $515,000 
D) $560,000 
A) $485,000 
B) $500,000 
C) $515,000 
D) $560,000

Question 8

Many companies report cash flow per common share on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 9

Use the information below for Alpha Inc.for 2015 and 2016 to answer the following question.   During 2016, Alpha Inc.sold equipment with a cost of $30,000 and accumulated depreciation of $25,000.A gain of $3,000 was recognized on the sale of the equipment This was the only equipment sale during the year.
What amount would be reported as the cash proceeds from the sale of equipment?

Accepted Answer

A) $2,000 
B) $3,000 
C) $5,000 
D) $8,000 
A) $2,000 
B) $3,000 
C) $5,000 
D) $8,000

Question 10

The cash flow adequacy ratio is defined as:

Accepted Answer

A) True 
 B)False

Question 11

The amount of cash provided from operating activities is under both the direct and indirect methods.

Accepted Answer

The answer of The amount of cash provided from operating...

Question 12

Cash flows from purchases of merchandise are classified as investing activities.

Accepted Answer

A) True 
 B)False

Question 13

Eduardo's Texas Cantina had the following results for December 31, 2015 and 2016, respectively:   What was the amount of cash flows from investing activities for 2016?

Accepted Answer

A) Cash inflow of $378,000 
B) Cash outflow of $378,000 
C) Cash outflow of $7,000 
D) Cash outflow of $391,000 
A) Cash inflow of $378,000 
B) Cash outflow of $378,000 
C) Cash outflow of $7,000 
D) Cash outflow of $391,000

Question 14

During 2015, the accounts receivable balance of Dickerson Corp.increased.Which of the following statements is true?

Accepted Answer

A) This indicates that Dickerson sold more than it collected in cash during the period. 
B) This increase is added to net income in the operating activities section of a statement of cash flows prepared under the indirect method. 
C) This increase is added to sales recognized on the income statement to determine the cash collections from customers during the period. 
D) This increase is considered only when the operating activities section of a statement of cash flows is prepared under the indirect method. 
A) This indicates that Dickerson sold more than it collected in cash during the period. 
B) This increase is added to net income in the operating activities section of a statement of cash flows prepared under the indirect method. 
C) This increase is added to sales recognized on the income statement to determine the cash collections from customers during the period. 
D) This increase is considered only when the operating activities section of a statement of cash flows is prepared under the indirect method.

Question 15

A mortgage incurred in exchange for an office building would be reported in the statement of cash flows in

Accepted Answer

A) the cash flows from financing activities section 
B) the cash flows from investing activities section 
C) a separate schedule 
D) the cash flows from operating activities section 
A) the cash flows from financing activities section 
B) the cash flows from investing activities section 
C) a separate schedule 
D) the cash flows from operating activities section

Question 16

When using the direct method, how is the purchase of equipment for cash shown on the statement of cash flows?

Accepted Answer

A) Operating activity 
B) Investing activity 
C) Financing activity 
D) Noncash investing and financing activity 
A) Operating activity 
B) Investing activity 
C) Financing activity 
D) Noncash investing and financing activity

Question 17

Upon review of Young's Garden Center statement of cash flows, the following was noted:   From this information, the most likely explanation is that Young's is

Accepted Answer

A) using cash from operations and selling long-term assets to pay back debt. 
B) using cash from operations and borrowing to purchase long-term assets. 
C) using its profits to expand growth. 
D) using cash from investors to provide for operations 
A) using cash from operations and selling long-term assets to pay back debt. 
B) using cash from operations and borrowing to purchase long-term assets. 
C) using its profits to expand growth. 
D) using cash from investors to provide for operations

Question 18

Cash flow per share is computed by dividing cash on the balance sheet by the number of shares outstanding.

Accepted Answer

A) True 
 B)False

Question 19

Cash flows from acquiring and selling products are classified as

Accepted Answer

A) operating activities. 
B) investing activities. 
C) financing activities. 
D) distribution activities. 
A) operating activities. 
B) investing activities. 
C) financing activities. 
D) distribution activities.

Question 20

Operating activities involve the acquiring and selling of goods and services for cash or on account.

Accepted Answer

A) True 
 B)False

The objective of the indirect method is to reconcile net income to net cash flow from _______________________________.

Parks Company reported an increase of $370,000 in its accounts receivable during the year 2015.The company's statement of cash flows for 2015 reported $1 million of cash received from customers.What amount of net sales must Parks have recorded in 2015?

Which of the following should be classified as an investing activity on the statement of cash flows?

The issuance of common stock in exchange for a building would appear both as a cash inflow in the financing activities section of the cash flow statement and also as a cash outflow in the investing activities section.

The repurchase of a company's own stock should be reported on the statement of cash flows as an investing activity.

Many companies report cash flow per common share on the statement of cash flows.

The cash flow adequacy ratio is defined as:

The amount of cash provided from operating activities is under both the direct and indirect methods.

Cash flows from purchases of merchandise are classified as investing activities.

Eduardo's Texas Cantina had the following results for December 31, 2015 and 2016, respectively: What was the amount of cash flows from investing activities for 2016?

During 2015, the accounts receivable balance of Dickerson Corp.increased.Which of the following statements is true?

A mortgage incurred in exchange for an office building would be reported in the statement of cash flows in

When using the direct method, how is the purchase of equipment for cash shown on the statement of cash flows?

Upon review of Young's Garden Center statement of cash flows, the following was noted: From this information, the most likely explanation is that Young's is

Cash flow per share is computed by dividing cash on the balance sheet by the number of shares outstanding.

Cash flows from acquiring and selling products are classified as

Operating activities involve the acquiring and selling of goods and services for cash or on account.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

Financial Statement Analysis

International Financial Reporting Standards

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Exam 12: The Statement of Cash Flows

The objective of the indirect method is to reconcile net income to net cash flow from _______________________________.

Parks Company reported an increase of $370,000 in its accounts receivable during the year 2015.The company's statement of cash flows for 2015 reported $1 million of cash received from customers.What amount of net sales must Parks have recorded in 2015?

Which of the following should be classified as an investing activity on the statement of cash flows?

The issuance of common stock in exchange for a building would appear both as a cash inflow in the financing activities section of the cash flow statement and also as a cash outflow in the investing activities section.

The repurchase of a company's own stock should be reported on the statement of cash flows as an investing activity.

Many companies report cash flow per common share on the statement of cash flows.

The cash flow adequacy ratio is defined as:

The amount of cash provided from operating activities is under both the direct and indirect methods.

Cash flows from purchases of merchandise are classified as investing activities.

Eduardo's Texas Cantina had the following results for December 31, 2015 and 2016, respectively: What was the amount of cash flows from investing activities for 2016?

During 2015, the accounts receivable balance of Dickerson Corp.increased.Which of the following statements is true?

A mortgage incurred in exchange for an office building would be reported in the statement of cash flows in

When using the direct method, how is the purchase of equipment for cash shown on the statement of cash flows?

Upon review of Young's Garden Center statement of cash flows, the following was noted: From this information, the most likely explanation is that Young's is

Cash flow per share is computed by dividing cash on the balance sheet by the number of shares outstanding.

Cash flows from acquiring and selling products are classified as

Operating activities involve the acquiring and selling of goods and services for cash or on account.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

Financial Statement Analysis

International Financial Reporting Standards

Filters