Question 1

Cash flows from issuing and repurchasing stock or issuing and repaying retiring) debt are classified as

Accepted Answer

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

Question 2

Cuero Co.reported a net loss of $30,000 for 2015, yet its cash balance increased during the year.Which financial statement should Cuero's management refer to for an explanation of this situation?

Accepted Answer

A) Balance sheet 
B) Income statement 
C) Statement of Retained Earnings 
D) Statement of Cash Flows 
A) Balance sheet 
B) Income statement 
C) Statement of Retained Earnings 
D) Statement of Cash Flows

Question 3

Use the equation presented below to answer the question that follows:
Cash = CL + LTL + CS + RE - NCCA - LTA
Where: CL = Current liabilities
LTL = Long-term liabilities
CS = Common stock
RE = Retained earnings
NCCA = Noncash current assets
LTA = Long-term assets
Which of the following activities results in a cash inflow?

Accepted Answer

A) Increases in noncash current assets NCC
A)  
B) Decreases in current liabilities CL) 
C) Increases in common stock CS) 
D) Decreases in retained earnings R
E)  
A) Increases in noncash current assets NCC
A)  
B) Decreases in current liabilities CL) 
C) Increases in common stock CS) 
D) Decreases in retained earnings R
E)

Question 4

Which of the following statements is false?

Accepted Answer

A) A balance sheet reports a company's cash balance at a specific date. 
B) An income statement reports the amounts of revenue and expense on an accrual basis, not the amount of cash received from revenues or paid for expenses. 
C) A statement of retained earnings reports the amount of cash received from operating activities and the amount of cash paid for dividends. 
D) A statement of cash flows explains the changes in cash from operating, investing, and financing activities. 
A) A balance sheet reports a company's cash balance at a specific date. 
B) An income statement reports the amounts of revenue and expense on an accrual basis, not the amount of cash received from revenues or paid for expenses. 
C) A statement of retained earnings reports the amount of cash received from operating activities and the amount of cash paid for dividends. 
D) A statement of cash flows explains the changes in cash from operating, investing, and financing activities.

Question 5

Cash flows from acquiring and disposing of long-term assets are classified as

Accepted Answer

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

Question 6

Which of the following transactions is a significant noncash investing and financing activity?

Accepted Answer

A) Land is purchased for cash. 
B) Bonds are issued for cash. 
C) Cash equivalents are purchased. 
D) Equipment is acquired by issuing a long-term note. 
A) Land is purchased for cash. 
B) Bonds are issued for cash. 
C) Cash equivalents are purchased. 
D) Equipment is acquired by issuing a long-term note.

Question 7

Which of the following operating activities results in a cash outflow?

Accepted Answer

A) Paying creditors for merchandise 
B) Collecting accounts receivable 
C) Making cash sales 
D) Receiving deposits recorded as unearned revenue 
A) Paying creditors for merchandise 
B) Collecting accounts receivable 
C) Making cash sales 
D) Receiving deposits recorded as unearned revenue

Question 8

Which of the following is not a current reporting requirement for a statement that reports changes in cash over a period of time?

Accepted Answer

A) This statement must classify cash flows into three categories: operating, investing, and financing activities. 
B) Cash equivalents must be combined with cash in preparing this statement. 
C) Working capital may be used as a substitute for cash in preparing this statement. 
D) The title for this statement is "Statement of Cash Flows." 
A) This statement must classify cash flows into three categories: operating, investing, and financing activities. 
B) Cash equivalents must be combined with cash in preparing this statement. 
C) Working capital may be used as a substitute for cash in preparing this statement. 
D) The title for this statement is "Statement of Cash Flows."

Question 9

Which of the following is not an investing activity?

Accepted Answer

A) Purchase of investments for cash. 
B) Purchase of equipment for cash. 
C) Sale of merchandise for cash. 
D) Sale of land for cash. 
A) Purchase of investments for cash. 
B) Purchase of equipment for cash. 
C) Sale of merchandise for cash. 
D) Sale of land for cash.

Question 10

When using the indirect method, how is depreciation expense recorded 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 11

Which of the following statements is false?

Accepted Answer

A) The method of preparing the operating activities section of a statement of cash flows which adjusts net income to remove the effects of deferrals and accruals for revenues and expenses is the indirect method. 
B) The method of preparing the operating activities section of a statement of cash flows which reports major classes of gross cash receipts and cash payments for revenues and expenses is the direct method. 
C) The FASB prefers the direct method of preparing the operating activities section of the statement of cash flows. 
D) Most companies use the direct method of preparing the operating activities section of the statement of cash flows. 
A) The method of preparing the operating activities section of a statement of cash flows which adjusts net income to remove the effects of deferrals and accruals for revenues and expenses is the indirect method. 
B) The method of preparing the operating activities section of a statement of cash flows which reports major classes of gross cash receipts and cash payments for revenues and expenses is the direct method. 
C) The FASB prefers the direct method of preparing the operating activities section of the statement of cash flows. 
D) Most companies use the direct method of preparing the operating activities section of the statement of cash flows.

Question 12

Because the cash received from the sale of long-term assets is reported in the investing activities section of the statement of cash flows, any gain or loss is built into the cash received under the direct method.

Accepted Answer

A) True 
 B)False

Question 13

Klein Corp.acquired land by issuing its common stock.How should this transaction be disclosed when a statement of cash flows is prepared?

Accepted Answer

A) In a supplemental schedule of noncash investing and financing activities or in a note. 
B) The acquisition of land should be reported as an investing activity and the issuance of the stock as a financing activity. 
C) Using the master T-account approach. 
D) The transaction does not need to be disclosed. 
A) In a supplemental schedule of noncash investing and financing activities or in a note. 
B) The acquisition of land should be reported as an investing activity and the issuance of the stock as a financing activity. 
C) Using the master T-account approach. 
D) The transaction does not need to be disclosed.

Question 14

When using the direct method, how is the retirement of bonds payable at their maturity date 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 15

O'Bryan Company began the year with a balance of $18,000 in Salaries and Wages Payable and ended the year with $11,000 in the account.Salaries and Wages Expense for the period amounted to $91,000.Under the direct method, O'Bryan will report cash payments for salaries and wages of:

Accepted Answer

A) $84,000 
B) $102,000 
C) $109,000 
D) $98,000 
A) $84,000 
B) $102,000 
C) $109,000 
D) $98,000

Question 16

Under the indirect method, a loss from the retirement of bonds is to net income in the operating activities section of the statement of cash flows.

Accepted Answer

The answer of Under the indirect method, a loss from...

Question 17

are items which are readily convertible into a known amount of cash and have an original maturity to the investor of three months or less.

Accepted Answer

The answer of are items which are readily convertible into...

Question 18

Suma Corp.reported the following information for 2015 and 2016.   How much cash was paid for salaries during 2016?

Accepted Answer

A) $55,100 
B) $55,200 
C) $57,000 
D) $58,900 
A) $55,100 
B) $55,200 
C) $57,000 
D) $58,900

Question 19

The direct method of reporting cash flows from operating activities involves reconciling net income and cash flow from operations.

Accepted Answer

A) True 
 B)False

Question 20

Issuance of stock results in cash inflows that appear in the financing section of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Cash flows from issuing and repurchasing stock or issuing and repaying retiring) debt are classified as

Cuero Co.reported a net loss of $30,000 for 2015, yet its cash balance increased during the year.Which financial statement should Cuero's management refer to for an explanation of this situation?

Which of the following statements is false?

Cash flows from acquiring and disposing of long-term assets are classified as

Which of the following transactions is a significant noncash investing and financing activity?

Which of the following operating activities results in a cash outflow?

Which of the following is not a current reporting requirement for a statement that reports changes in cash over a period of time?

Which of the following is not an investing activity?

When using the indirect method, how is depreciation expense recorded on the statement of cash flows?

Which of the following statements is false?

Because the cash received from the sale of long-term assets is reported in the investing activities section of the statement of cash flows, any gain or loss is built into the cash received under the direct method.

Klein Corp.acquired land by issuing its common stock.How should this transaction be disclosed when a statement of cash flows is prepared?

When using the direct method, how is the retirement of bonds payable at their maturity date shown on the statement of cash flows?

O'Bryan Company began the year with a balance of $18,000 in Salaries and Wages Payable and ended the year with $11,000 in the account.Salaries and Wages Expense for the period amounted to $91,000.Under the direct method, O'Bryan will report cash payments for salaries and wages of:

Under the indirect method, a loss from the retirement of bonds is to net income in the operating activities section of the statement of cash flows.

are items which are readily convertible into a known amount of cash and have an original maturity to the investor of three months or less.

Suma Corp.reported the following information for 2015 and 2016. How much cash was paid for salaries during 2016?

The direct method of reporting cash flows from operating activities involves reconciling net income and cash flow from operations.

Issuance of stock results in cash inflows that appear in the financing section of the statement of cash flows.

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

Exam 12: The Statement of Cash Flows

Cash flows from issuing and repurchasing stock or issuing and repaying retiring) debt are classified as

Cuero Co.reported a net loss of $30,000 for 2015, yet its cash balance increased during the year.Which financial statement should Cuero's management refer to for an explanation of this situation?

Which of the following statements is false?

Cash flows from acquiring and disposing of long-term assets are classified as

Which of the following transactions is a significant noncash investing and financing activity?

Which of the following operating activities results in a cash outflow?

Which of the following is not a current reporting requirement for a statement that reports changes in cash over a period of time?

Which of the following is not an investing activity?

When using the indirect method, how is depreciation expense recorded on the statement of cash flows?

Which of the following statements is false?

Because the cash received from the sale of long-term assets is reported in the investing activities section of the statement of cash flows, any gain or loss is built into the cash received under the direct method.

Klein Corp.acquired land by issuing its common stock.How should this transaction be disclosed when a statement of cash flows is prepared?

When using the direct method, how is the retirement of bonds payable at their maturity date shown on the statement of cash flows?

O'Bryan Company began the year with a balance of $18,000 in Salaries and Wages Payable and ended the year with $11,000 in the account.Salaries and Wages Expense for the period amounted to $91,000.Under the direct method, O'Bryan will report cash payments for salaries and wages of:

Under the indirect method, a loss from the retirement of bonds is to net income in the operating activities section of the statement of cash flows.

are items which are readily convertible into a known amount of cash and have an original maturity to the investor of three months or less.

Suma Corp.reported the following information for 2015 and 2016. How much cash was paid for salaries during 2016?

The direct method of reporting cash flows from operating activities involves reconciling net income and cash flow from operations.

Issuance of stock results in cash inflows that appear in the financing section of the statement of cash flows.

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