Question 1

Cash provided by operations is generally equal to operating income.

Accepted Answer

A) True 
 B)False

Question 2

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 3

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 4

Miller Company purchased treasury stock with a cost of $15,000 during 2010. During the year, the company paid dividends of $20,000 and issued bonds payable for proceeds of $866,000. Cash flows from financing activities for 2010 total

Accepted Answer

A)  $846,000 net cash inflow. 
B)  $861,000 net cash inflow. 
C)  $866,000 net cash outflow. 
D)  $831,000 net cash inflow. 
A)  $846,000 net cash inflow. 
B)  $861,000 net cash inflow. 
C)  $866,000 net cash outflow. 
D)  $831,000 net cash inflow.

Question 5

Indicate where the event paid income taxes would appear, if at all, on the statement of cash flows.

Accepted Answer

A)  Operating activities section 
B)  Investing activities section 
C)  Financing activities section 
D)  Does not represent a cash flow 
A)  Operating activities section 
B)  Investing activities section 
C)  Financing activities section 
D)  Does not represent a cash flow

Question 6

Which of the following transactions would not be classified as a financing activity?

Accepted Answer

A)  Purchase of treasury stock 
B)  Payment of dividends 
C)  Issuance of bonds at a discount 
D)  Purchase of a long-term investment in bonds 
A)  Purchase of treasury stock 
B)  Payment of dividends 
C)  Issuance of bonds at a discount 
D)  Purchase of a long-term investment in bonds

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

The acquisition of a building by issuing bonds would be considered an investing and financing activity that did not affect cash.

Accepted Answer

A) True 
 B)False

Question 9

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 10

The income statement for Javier Company showed cost of goods sold of $85,000 and operating expenses of $55,000. The comparative balance sheets for the year show that inventory decreased $3,000, prepaid expenses increased $7,000, accounts payable increased $4,000, and accrued expenses payable decreased $5,000.
Instructions
Compute (a) cash payments to suppliers and (b) cash payments for operating expenses using the direct method.

Accepted Answer

(a) Cash payments to suppliers

Question 11

Which of the following would be subtracted from net income using the indirect method?

Accepted Answer

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

Question 12

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 13

In Shannon Company, there was an increase in the land account during the year of $48,000. Analysis reveals that the change resulted form a cash sale of land at cost $110,000, and a cash purchase of land for $158,000. In the statement of cash flows, the change in the land account should be reported in the investment section:

Accepted Answer

A)  as a net purchase of land, $48,000. 
B)  only as a purchase of land $158,000. 
C)  as a purchase of land $158,000 and a sale of land $110,000. 
D)  only as a sale of land $110,000. 
A)  as a net purchase of land, $48,000. 
B)  only as a purchase of land $158,000. 
C)  as a purchase of land $158,000 and a sale of land $110,000. 
D)  only as a sale of land $110,000.

Question 14

A statement of cash flows indicates the sources and uses of cash during a period.

Accepted Answer

A) True 
 B)False

Question 15

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 16

Gary Company reports a $15,000 increase in inventory and a $5,000 increase in accounts payable during the year. Cost of Goods Sold for the year was $160,000. The cash payments made to suppliers were

Accepted Answer

A)  $160,000. 
B)  $170,000. 
C)  $140,000. 
D)  $155,000. 
A)  $160,000. 
B)  $170,000. 
C)  $140,000. 
D)  $155,000.

Question 17

Banner Company had total operating expenses of $160,000 in 2010, which included Depreciation Expense of $25,000. Also, during 2010, prepaid expenses increased by $5,000 and accrued expenses decreased by $6,700.
Instructions
Calculate the amount of cash payments for operating expenses in 2010 using the direct method.

Accepted Answer

The answer of Banner Company had total operating expenses of...

Question 18

Cribbets Company uses the direct method in determining net cash provided by operating activities, During the year, operating expenses were $290,000, prepaid expenses increased $20,000, and accrued expenses payable increased $30,000. Cash payments for operating expenses were

Accepted Answer

A)  $240,000. 
B)  $340,000. 
C)  $300,000. 
D)  $280,000. 
A)  $240,000. 
B)  $340,000. 
C)  $300,000. 
D)  $280,000.

Question 19

In the Roswell Corporation, cash receipts from customers were $138,000, cash payments for operating expenses were $102,000, and one-third of the company's $6.300 income taxes were paid during the year. Net cash provided by operating activities is:

Accepted Answer

A)  $36,000. 
B)  $29,700. 
C)  $33,900. 
D)  $31,800. 
A)  $36,000. 
B)  $29,700. 
C)  $33,900. 
D)  $31,800.

Question 20

Dutton Company prepared the tabulation below at December 31, 2010.   
Adjustments to reconcile net income to net cash provided by operating activities:   
Instructions
Show how each item should be reported in the statement of cash flows. Use parentheses for deductions.

Accepted Answer

The answer of Dutton Company prepared the tabulation below at...

Exam 17: Statement of Cash Flows

Cash provided by operations is generally equal to operating income.

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

If accounts receivable have increased during the period,

Miller Company purchased treasury stock with a cost of $15,000 during 2010. During the year, the company paid dividends of $20,000 and issued bonds payable for proceeds of $866,000. Cash flows from financing activities for 2010 total

Indicate where the event paid income taxes would appear, if at all, on the statement of cash flows.

Which of the following transactions would not be classified as a financing activity?

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

The acquisition of a building by issuing bonds would be considered an investing and financing activity that did not affect cash.

Investing activities include

Which of the following would be subtracted from net income using the indirect method?

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

A statement of cash flows indicates the sources and uses of cash during a period.

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

Gary Company reports a $15,000 increase in inventory and a $5,000 increase in accounts payable during the year. Cost of Goods Sold for the year was $160,000. The cash payments made to suppliers were

Cribbets Company uses the direct method in determining net cash provided by operating activities, During the year, operating expenses were $290,000, prepaid expenses increased $20,000, and accrued expenses payable increased $30,000. Cash payments for operating expenses were

In the Roswell Corporation, cash receipts from customers were $138,000, cash payments for operating expenses were $102,000, and one-third of the company's $6.300 income taxes were paid during the year. Net cash provided by operating activities is:

Dutton Company prepared the tabulation below at December 31, 2010. Adjustments to reconcile net income to net cash provided by operating activities: Instructions Show how each item should be reported in the statement of cash flows. Use parentheses for deductions.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Financial Analysis: the Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

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