Question 1

Which one of the following items is not necessary for preparing a statement of cash flows?

Accepted Answer

A) Determine the change in cash. 
B) Determine the cash provided by operations. 
C) Determine cash from financing and investing activities. 
D) Determine the cash in each of the bank accounts. 
A) Determine the change in cash. 
B) Determine the cash provided by operations. 
C) Determine cash from financing and investing activities. 
D) Determine the cash in each of the bank accounts.

Question 2

Of the items below, the one that appears first on the statement of cash flows is

Accepted Answer

A) noncash investing and financing activities. 
B) net increase (decrease) in cash. 
C) cash at the end of the period. 
D) cash at the beginning of the period. 
A) noncash investing and financing activities. 
B) net increase (decrease) in cash. 
C) cash at the end of the period. 
D) cash at the beginning of the period.

Question 3

Odom Company's prepaid expenses increased $3,000 between 12/31/2021 and the 12/31/2022.If Odom uses a worksheet is to facilitate the preparation of the statement of cash flows, the entry in the reconciling columns of the worksheet would be

Accepted Answer

A) Operating- Increase in Prepaid Expenses (debit column), Prepaid Expenses (credit column). 
B) Prepaid Expenses (debit column), Cash (credit column). 
C) Prepaid Expenses (debit column) Operating- Increase in Prepaid Expenses (credit column). 
D) Cash (debit column), Prepaid Expenses (credit column). 
A) Operating- Increase in Prepaid Expenses (debit column), Prepaid Expenses (credit column). 
B) Prepaid Expenses (debit column), Cash (credit column). 
C) Prepaid Expenses (debit column) Operating- Increase in Prepaid Expenses (credit column). 
D) Cash (debit column), Prepaid Expenses (credit column).

Question 4

The following information relates to Layline Company:   Using the direct method of reporting cash flows from operating activities, what was the amount of cash paid for insurance premiums by Layline during 2022?

Accepted Answer

A) $1,578,000. 
B) $1,622,000. 
C) $1,880,000. 
D) -$1,622,000. 
A) $1,578,000. 
B) $1,622,000. 
C) $1,880,000. 
D) -$1,622,000.

Question 5

As an adjustment to operating expenses per the income statement, an increase in accrued liabilities would be added to operating expenses to determine cash payments for operating expenses.

Accepted Answer

A) True 
 B)False

Question 6

Stolberg Company reported a net loss of $12,000 for the year ended December 31, 2022.During the year, accounts receivable decreased $28,000, inventory increased $20,000, accounts payable increased by $30,000, and depreciation expense of $24,000 was recorded.During 2022, operating activities

Accepted Answer

A) used net cash of $14,000. 
B) used net cash of $50,000. 
C) provided net cash of $50,000. 
D) provided net cash of $74,000. 
A) used net cash of $14,000. 
B) used net cash of $50,000. 
C) provided net cash of $50,000. 
D) provided net cash of $74,000.

Question 7

On the statement of cash flows using the indirect method, patent amortization expense will

Accepted Answer

A) be added to net income in the operating section. 
B) be deducted from net income in the operating section. 
C) appear as an inflow of cash in the investing section. 
D) appear as an outflow of cash in the investing section. 
A) be added to net income in the operating section. 
B) be deducted from net income in the operating section. 
C) appear as an inflow of cash in the investing section. 
D) appear as an outflow of cash in the investing section.

Question 8

The statement of cash flows shows the effects on net income of a company's operating, investing, and financing activities for an accounting period.

Accepted Answer

A) True 
 B)False

Question 9

A company would be expected to generate small amounts of cash from operations during the

Accepted Answer

A) introductory phase. 
B) growth phase. 
C) maturity phase. 
D) decline phase. 
A) introductory phase. 
B) growth phase. 
C) maturity phase. 
D) decline phase.

Question 10

Cash provided by operations is generally equal to operating income.

Accepted Answer

A) True 
 B)False

Question 11

Cash receipts from customers are greater than sales revenues when there is a(n)

Accepted Answer

A) increase in accounts receivable. 
B) decrease in accounts receivable. 
C) increase in cost of goods sold. 
D) decrease in cost of goods sold. 
A) increase in accounts receivable. 
B) decrease in accounts receivable. 
C) increase in cost of goods sold. 
D) decrease in cost of goods sold.

Question 12

The cost of goods sold during the year was $305,000.Inventory decreased by $10,000 during the year and accounts payable decreased by $12,000 during the year.Using the direct method of reporting cash flows from operating activities, cash payments for inventory total

Accepted Answer

A) $317,000. 
B) $307,000. 
C) $283,000. 
D) $327,000. 
A) $317,000. 
B) $307,000. 
C) $283,000. 
D) $327,000.

Question 13

Forsythe Company had a $30,000 increase in accounts payable from the prior period.If a worksheet is used to facilitate the preparation of the statement of cash flows, the entry in the reconciling columns of the worksheet would be

Accepted Answer

A) Operating- Increase in Accounts Payable (debit column), Accounts Payable (credit column). 
B) Accounts Payable (debit column), Cash (credit column). 
C) Accounts Payable (debit column) Operating- Increase in Accounts Payable (credit column). 
D) Cash (debit column), Accounts Payable (credit column). 
A) Operating- Increase in Accounts Payable (debit column), Accounts Payable (credit column). 
B) Accounts Payable (debit column), Cash (credit column). 
C) Accounts Payable (debit column) Operating- Increase in Accounts Payable (credit column). 
D) Cash (debit column), Accounts Payable (credit column).

Question 14

The growth phase of the product life cycle occurs when the company is purchasing fixed assets and beginning to produce and sell.

Accepted Answer

A) True 
 B)False

Question 15

The statement of cash flows classifies cash receipts and payments as operating, nonoperating, financial, and extraordinary activities.

Accepted Answer

A) True 
 B)False

Question 16

Noncash investing and financing transactions, such as the exchange of common stock to purchase assets, represent significant investing and financing activities and are reflected either in a schedule separate from the statement of cash flows or in a separate note to the financial statements.

Accepted Answer

A) True 
 B)False

Question 17

Assume that the Park Corporation uses the indirect method to depict cash flows.Indicate where, if at all, an accounts receivable decrease would be classified 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 18

The information to prepare the statement of cash flows comes from all of the following sources except

Accepted Answer

A) comparative balance sheets. 
B) additional transaction data about cash provided or used during the period. 
C) adjusted trial balance. 
D) current income statement. 
A) comparative balance sheets. 
B) additional transaction data about cash provided or used during the period. 
C) adjusted trial balance. 
D) current income statement.

Question 19

Preferred stock issued in exchange for land 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 or note to the financial statements. 
D) the cash flows from the operating section. 
A) the cash flows from financing activities section. 
B) the cash flows from investing activities section. 
C) a separate schedule or note to the financial statements. 
D) the cash flows from the operating section.

Question 20

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

Which one of the following items is not necessary for preparing a statement of cash flows?

Of the items below, the one that appears first on the statement of cash flows is

Odom Company's prepaid expenses increased $3,000 between 12/31/2021 and the 12/31/2022.If Odom uses a worksheet is to facilitate the preparation of the statement of cash flows, the entry in the reconciling columns of the worksheet would be

The following information relates to Layline Company: Using the direct method of reporting cash flows from operating activities, what was the amount of cash paid for insurance premiums by Layline during 2022?

As an adjustment to operating expenses per the income statement, an increase in accrued liabilities would be added to operating expenses to determine cash payments for operating expenses.

Stolberg Company reported a net loss of $12,000 for the year ended December 31, 2022.During the year, accounts receivable decreased $28,000, inventory increased $20,000, accounts payable increased by $30,000, and depreciation expense of $24,000 was recorded.During 2022, operating activities

On the statement of cash flows using the indirect method, patent amortization expense will

The statement of cash flows shows the effects on net income of a company's operating, investing, and financing activities for an accounting period.

A company would be expected to generate small amounts of cash from operations during the

Cash provided by operations is generally equal to operating income.

Cash receipts from customers are greater than sales revenues when there is a(n)

The cost of goods sold during the year was $305,000.Inventory decreased by $10,000 during the year and accounts payable decreased by $12,000 during the year.Using the direct method of reporting cash flows from operating activities, cash payments for inventory total

Forsythe Company had a $30,000 increase in accounts payable from the prior period.If a worksheet is used to facilitate the preparation of the statement of cash flows, the entry in the reconciling columns of the worksheet would be

The growth phase of the product life cycle occurs when the company is purchasing fixed assets and beginning to produce and sell.

The statement of cash flows classifies cash receipts and payments as operating, nonoperating, financial, and extraordinary activities.

Noncash investing and financing transactions, such as the exchange of common stock to purchase assets, represent significant investing and financing activities and are reflected either in a schedule separate from the statement of cash flows or in a separate note to the financial statements.

Assume that the Park Corporation uses the indirect method to depict cash flows.Indicate where, if at all, an accounts receivable decrease would be classified on the statement of cash flows.

The information to prepare the statement of cash flows comes from all of the following sources except

Preferred stock issued in exchange for land would be reported in the statement of cash flows in

Which one of the following affects cash during a period?

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

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Exam 12: Statement of Cash Flows

Which one of the following items is not necessary for preparing a statement of cash flows?

Of the items below, the one that appears first on the statement of cash flows is

Odom Company's prepaid expenses increased $3,000 between 12/31/2021 and the 12/31/2022.If Odom uses a worksheet is to facilitate the preparation of the statement of cash flows, the entry in the reconciling columns of the worksheet would be

The following information relates to Layline Company: Using the direct method of reporting cash flows from operating activities, what was the amount of cash paid for insurance premiums by Layline during 2022?

As an adjustment to operating expenses per the income statement, an increase in accrued liabilities would be added to operating expenses to determine cash payments for operating expenses.

Stolberg Company reported a net loss of $12,000 for the year ended December 31, 2022.During the year, accounts receivable decreased $28,000, inventory increased $20,000, accounts payable increased by $30,000, and depreciation expense of $24,000 was recorded.During 2022, operating activities

On the statement of cash flows using the indirect method, patent amortization expense will

The statement of cash flows shows the effects on net income of a company's operating, investing, and financing activities for an accounting period.

A company would be expected to generate small amounts of cash from operations during the

Cash provided by operations is generally equal to operating income.

Cash receipts from customers are greater than sales revenues when there is a(n)

The cost of goods sold during the year was $305,000.Inventory decreased by $10,000 during the year and accounts payable decreased by $12,000 during the year.Using the direct method of reporting cash flows from operating activities, cash payments for inventory total

Forsythe Company had a $30,000 increase in accounts payable from the prior period.If a worksheet is used to facilitate the preparation of the statement of cash flows, the entry in the reconciling columns of the worksheet would be

The growth phase of the product life cycle occurs when the company is purchasing fixed assets and beginning to produce and sell.

The statement of cash flows classifies cash receipts and payments as operating, nonoperating, financial, and extraordinary activities.

Noncash investing and financing transactions, such as the exchange of common stock to purchase assets, represent significant investing and financing activities and are reflected either in a schedule separate from the statement of cash flows or in a separate note to the financial statements.

Assume that the Park Corporation uses the indirect method to depict cash flows.Indicate where, if at all, an accounts receivable decrease would be classified on the statement of cash flows.

The information to prepare the statement of cash flows comes from all of the following sources except

Preferred stock issued in exchange for land would be reported in the statement of cash flows in

Which one of the following affects cash during a period?

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

Filters