Question 1

Using the indirect method, an increase in accounts receivable during a period is deducted from net income in calculating cash provided by operations.

Accepted Answer

A) True 
 B)False

Question 2

The information to prepare the statement of cash flows usually comes from each of the following except

Accepted Answer

A)  the comparative balance sheet. 
B)  the prior year's income statement. 
C)  additional information. 
D)  the current income statement. 
A)  the comparative balance sheet. 
B)  the prior year's income statement. 
C)  additional information. 
D)  the current income statement.

Question 3

Each of the following are particularly interested in the statement of cash flows except

Accepted Answer

A)  creditors. 
B)  employees. 
C)  shareholders. 
D)  government agencies. 
A)  creditors. 
B)  employees. 
C)  shareholders. 
D)  government agencies.

Question 4

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 5

In developing the cash flows from operating activities, most companies in the U. S.

Accepted Answer

A)  use the direct method. 
B)  use the indirect method. 
C)  present both the indirect and direct methods in their financial reports. 
D)  prepare the operating activities section on the accrual basis. 
A)  use the direct method. 
B)  use the indirect method. 
C)  present both the indirect and direct methods in their financial reports. 
D)  prepare the operating activities section on the accrual basis.

Question 6

Cash provided by operations is generally equal to operating income.

Accepted Answer

A) True 
 B)False

Question 7

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 8

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 9

Each of the following is added to net income in computing net cash provided by operating activities except

Accepted Answer

A)  amortization expense. 
B)  an increase in accrued expenses payable. 
C)  a gain on sale of equipment. 
D)  a decrease in inventory. 
A)  amortization expense. 
B)  an increase in accrued expenses payable. 
C)  a gain on sale of equipment. 
D)  a decrease in inventory.

Question 10

If accounts receivable have increased during the period,

Accepted Answer

A)  revenues on an accrual basis are less than revenues on a cash basis. 
B)  revenues on an accrual basis are greater than revenues on a cash basis. 
C)  revenues on an accrual basis are the same as revenues on a cash basis. 
D)  expenses on an accrual basis are greater than expenses on a cash basis. 
A)  revenues on an accrual basis are less than revenues on a cash basis. 
B)  revenues on an accrual basis are greater than revenues on a cash basis. 
C)  revenues on an accrual basis are the same as revenues on a cash basis. 
D)  expenses on an accrual basis are greater than expenses on a cash basis.

Question 11

The acquisition of land by issuing common stock is

Accepted Answer

A)  a noncash transaction which is not reported in the body of a statement of cash flows. 
B)  a cash transaction and would be reported in the body of a statement of cash flows. 
C)  a noncash transaction and would be reported in the body of a statement of cash flows. 
D)  only reported if the statement of cash flows is prepared using the direct method. 
A)  a noncash transaction which is not reported in the body of a statement of cash flows. 
B)  a cash transaction and would be reported in the body of a statement of cash flows. 
C)  a noncash transaction and would be reported in the body of a statement of cash flows. 
D)  only reported if the statement of cash flows is prepared using the direct method.

Question 12

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 13

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

Accepted Answer

A) True 
 B)False

Question 14

To determine the net cash provided (used) by operating activities, it is necessary to analyze

Accepted Answer

A)  the current year's income statement. 
B)  a comparative balance sheet. 
C)  additional information. 
D)  all of these. 
A)  the current year's income statement. 
B)  a comparative balance sheet. 
C)  additional information. 
D)  all of these.

Question 15

Which one of the following affects cash during a period?

Accepted Answer

A)  Recording depreciation expense 
B)  Declaration of a cash dividend 
C)  Write-off of an uncollectible account receivable 
D)  Payment of an accounts payable 
A)  Recording depreciation expense 
B)  Declaration of a cash dividend 
C)  Write-off of an uncollectible account receivable 
D)  Payment of an accounts payable

Question 16

The adjusted trial balance is the only item needed to prepare the Statement of Cash Flows.

Accepted Answer

A) True 
 B)False

Question 17

The statement of cash flows should help investors and creditors assess each of the following except the

Accepted Answer

A)  entity's ability to generate future income. 
B)  entity's ability to pay dividends. 
C)  reasons for the difference between net income and net cash provided by operating activities. 
D)  cash investing and financing transactions during the period. 
A)  entity's ability to generate future income. 
B)  entity's ability to pay dividends. 
C)  reasons for the difference between net income and net cash provided by operating activities. 
D)  cash investing and financing transactions during the period.

Question 18

The change in cash is equal to the change in liabilities less the change in equity plus the change in noncash assets.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following would not be an adjustment to net income using the indirect method?

Accepted Answer

A)  Depreciation Expense 
B)  An increase in Prepaid Insurance 
C)  Amortization Expense 
D)  An increase in Land 
A)  Depreciation Expense 
B)  An increase in Prepaid Insurance 
C)  Amortization Expense 
D)  An increase in Land

Question 20

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.

Using the indirect method, an increase in accounts receivable during a period is deducted from net income in calculating cash provided by operations.

The information to prepare the statement of cash flows usually comes from each of the following except

Each of the following are particularly interested in the statement of cash flows except

Cash receipts from interest and dividends are classified as

In developing the cash flows from operating activities, most companies in the U. S.

Cash provided by operations is generally equal to operating income.

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

Investing activities include

Each of the following is added to net income in computing net cash provided by operating activities except

If accounts receivable have increased during the period,

The acquisition of land by issuing common stock is

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

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

To determine the net cash provided (used) by operating activities, it is necessary to analyze

Which one of the following affects cash during a period?

The adjusted trial balance is the only item needed to prepare the Statement of Cash Flows.

The statement of cash flows should help investors and creditors assess each of the following except the

The change in cash is equal to the change in liabilities less the change in equity plus the change in noncash assets.

Which of the following would not be an adjustment to net income using the indirect method?

Free cash flow equals cash provided by

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

Exam 13: Statement of Cash Flows

Using the indirect method, an increase in accounts receivable during a period is deducted from net income in calculating cash provided by operations.

The information to prepare the statement of cash flows usually comes from each of the following except

Each of the following are particularly interested in the statement of cash flows except

Cash receipts from interest and dividends are classified as

In developing the cash flows from operating activities, most companies in the U. S.

Cash provided by operations is generally equal to operating income.

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

Investing activities include

Each of the following is added to net income in computing net cash provided by operating activities except

If accounts receivable have increased during the period,

The acquisition of land by issuing common stock is

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

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

To determine the net cash provided (used) by operating activities, it is necessary to analyze

Which one of the following affects cash during a period?

The adjusted trial balance is the only item needed to prepare the Statement of Cash Flows.

The statement of cash flows should help investors and creditors assess each of the following except the

The change in cash is equal to the change in liabilities less the change in equity plus the change in noncash assets.

Which of the following would not be an adjustment to net income using the indirect method?

Free cash flow equals cash provided by

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