Question 1

Noncash investing and financing activities must be reported in the body of a statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 2

The cash effects of transactions that create revenues and expenses are

Accepted Answer

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

Question 3

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 4

Starting with net income and adjusting it for items that affected reported net income but which did not affect cash is called the

Accepted Answer

A)  direct method. 
B)  indirect method. 
C)  working capital method. 
D)  cost-benefit method. 
A)  direct method. 
B)  indirect method. 
C)  working capital method. 
D)  cost-benefit method.

Question 5

Each of the following would be reported under operating activities except cash receipts

Accepted Answer

A)  from sales of goods. 
B)  from sales of investments. 
C)  of interest on loans. 
D)  of dividends from investments. 
A)  from sales of goods. 
B)  from sales of investments. 
C)  of interest on loans. 
D)  of dividends from investments.

Question 6

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 7

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 8

Each of the following is an example of a significant noncash activity except

Accepted Answer

A)  conversion of bonds into common stock. 
B)  exchanges of plant assets. 
C)  issuance of debt to purchase assets. 
D)  stock dividends. 
A)  conversion of bonds into common stock. 
B)  exchanges of plant assets. 
C)  issuance of debt to purchase assets. 
D)  stock dividends.

Question 9

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 10

Which of the following would be added to net income using the indirect method?

Accepted Answer

A)  An increase in accounts receivable 
B)  An increase in prepaid expenses 
C)  Depreciation expense 
D)  A decrease in accounts payable 
A)  An increase in accounts receivable 
B)  An increase in prepaid expenses 
C)  Depreciation expense 
D)  A decrease in accounts payable

Question 11

Financing activities include the obtaining of cash from issuing debt and repaying the amounts borrowed.

Accepted Answer

A) True 
 B)False

Question 12

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 13

In calculating cash flows from operating activities using the indirect method, a gain on the sale of equipment is

Accepted Answer

A)  added to net income. 
B)  deducted from net income. 
C)  ignored because it does not affect cash. 
D)  not reported on a statement of cash flows. 
A)  added to net income. 
B)  deducted from net income. 
C)  ignored because it does not affect cash. 
D)  not reported on a statement of cash flows.

Question 14

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 15

A primary objective of the statement of cash flows is to show the income or loss on investing and financing transactions.

Accepted Answer

A) True 
 B)False

Question 16

The statement of cash flows will not provide insight into

Accepted Answer

A)  why dividends were not increased. 
B)  whether cash flow is greater than net income. 
C)  the exact proceeds of a future bond issue. 
D)  how the retirement of debt was accomplished. 
A)  why dividends were not increased. 
B)  whether cash flow is greater than net income. 
C)  the exact proceeds of a future bond issue. 
D)  how the retirement of debt was accomplished.

Question 17

During a period, cost of goods sold + an increase in inventory + an increase in accounts payable = cash paid to suppliers.

Accepted Answer

A) True 
 B)False

Question 18

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 19

Which of the following steps is not required in preparing the statement of cash flows?

Accepted Answer

A)  Determine the net change in cash. 
B)  Determine the net cash provided by operating activities. 
C)  Determine cash from investing and financing activities. 
D)  Determine the change in current assets. 
A)  Determine the net change in cash. 
B)  Determine the net cash provided by operating activities. 
C)  Determine cash from investing and financing activities. 
D)  Determine the change in current assets.

Question 20

Operating expenses + an increase in prepaid expenses - a decrease in accrued expenses payable = cash payments for operating expenses.

Accepted Answer

A) True 
 B)False

Noncash investing and financing activities must be reported in the body of a statement of cash flows.

The cash effects of transactions that create revenues and expenses are

The statement of cash flows will not report the

Starting with net income and adjusting it for items that affected reported net income but which did not affect cash is called the

Each of the following would be reported under operating activities except cash receipts

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.

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

Each of the following is an example of a significant noncash activity except

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

Which of the following would be added to net income using the indirect method?

Financing activities include the obtaining of cash from issuing debt and repaying the amounts borrowed.

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

In calculating cash flows from operating activities using the indirect method, a gain on the sale of equipment is

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

A primary objective of the statement of cash flows is to show the income or loss on investing and financing transactions.

The statement of cash flows will not provide insight into

During a period, cost of goods sold + an increase in inventory + an increase in accounts payable = cash paid to suppliers.

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

Which of the following steps is not required in preparing the statement of cash flows?

Operating expenses + an increase in prepaid expenses - a decrease in accrued expenses payable = cash payments for operating expenses.

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Financial Statement Analysis

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Exam 13: Statement of Cash Flows

Noncash investing and financing activities must be reported in the body of a statement of cash flows.

The cash effects of transactions that create revenues and expenses are

The statement of cash flows will not report the

Starting with net income and adjusting it for items that affected reported net income but which did not affect cash is called the

Each of the following would be reported under operating activities except cash receipts

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.

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

Each of the following is an example of a significant noncash activity except

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

Which of the following would be added to net income using the indirect method?

Financing activities include the obtaining of cash from issuing debt and repaying the amounts borrowed.

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

In calculating cash flows from operating activities using the indirect method, a gain on the sale of equipment is

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

A primary objective of the statement of cash flows is to show the income or loss on investing and financing transactions.

The statement of cash flows will not provide insight into

During a period, cost of goods sold + an increase in inventory + an increase in accounts payable = cash paid to suppliers.

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

Which of the following steps is not required in preparing the statement of cash flows?

Operating expenses + an increase in prepaid expenses - a decrease in accrued expenses payable = cash payments for operating expenses.

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Financial Statement Analysis

Filters