Question 1

When equipment is sold for cash, the amount received is reflected as a cash

Accepted Answer

A) receipt in the operating activities section. 
B) receipt in the financing activities section. 
C) receipt in the investing activities section. 
D) payment in the operating activities section. 
A) receipt in the operating activities section. 
B) receipt in the financing activities section. 
C) receipt in the investing activities section. 
D) payment in the operating activities section. C

Question 2

The statement of cash flows

Accepted Answer

A) is prepared instead of an statement of income under ASPE. 
B) is used to assess a company's ability to generate cash and the needs of the company in using the cash flows. 
C) is prepared from a comparative statement of income. 
D) reports basic earnings per share figures on a cash basis in the body of the statement. 
A) is prepared instead of an statement of income under ASPE. 
B) is used to assess a company's ability to generate cash and the needs of the company in using the cash flows. 
C) is prepared from a comparative statement of income. 
D) reports basic earnings per share figures on a cash basis in the body of the statement. B

Question 3

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

Accepted Answer

A) True 
 B)False  True

Question 4

Using the indirect method, which of the following would be added to net income?

Accepted Answer

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

Question 5

Under the direct method, an increase in inventory would be added to cost of goods sold to determine net purchases for the period.

Accepted Answer

A) True 
 B)False

Question 6

In preparing the statement of cash flows, determining the net increase or decrease in cash requires the use of

Accepted Answer

A) the adjusted trial balance. 
B) the current period's statement of retained earnings. 
C) a comparative statement of financial position. 
D) a comparative statement of income. 
A) the adjusted trial balance. 
B) the current period's statement of retained earnings. 
C) a comparative statement of financial position. 
D) a comparative statement of income.

Question 7

Dock Inc.reports the following:   If cost of goods sold for the year is $128,000, the amount of cash paid to suppliers is

Accepted Answer

A) $113,000. 
B) $121,000. 
C) $149,000. 
D) $107,000. 
A) $113,000. 
B) $121,000. 
C) $149,000. 
D) $107,000.

Question 8

The statement of cash flows will not report the

Accepted Answer

A) amount of cheques 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 cheques 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 9

Under ASPE, the payment of interest on a mortgage payable may be classified as a cash payment from financing activities.

Accepted Answer

A) True 
 B)False

Question 10

Using the indirect method, which of the following adjustments to convert net income to net cash provided by operating activities is incorrect?

Accepted Answer

The answer of Using the indirect method, which of the...

Question 11

On the statement of cash flows of a growing company, the reader should expect to see cash provided by its financing activities, not cash used.

Accepted Answer

A) True 
 B)False

Question 12

During the year, Tristan Inc.reported a $6,000 increase in Inventory and a $4,000 increase in Accounts Payable.Cost of goods sold for the year was $125,000.What were the cash payments made to suppliers during the year?

Accepted Answer

A) $135,000 
B) $127,000 
C) $115,000 
D) $123,000 
A) $135,000 
B) $127,000 
C) $115,000 
D) $123,000

Question 13

Use the following information for questions 
Boreal Corporation is a private corporation reporting under ASPE and uses the indirect method when preparing its statement of cash flows.The company has engaged in the following transactions.For each transaction, indicate where it would be reflected on the statement of cash flows.
-A payment of interest on a long-term bank loan:

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 14

A loss on sale of equipment is included in the investing activities on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 15

If a gain of $30,000 is incurred in selling (for cash) office equipment that cost $120,000 and had accumulated depreciation of $40,000, the total amount reported in investing activities is

Accepted Answer

A) $90,000. 
B) $110,000. 
C) $130,000. 
D) $150,000. 
A) $90,000. 
B) $110,000. 
C) $130,000. 
D) $150,000.

Question 16

Free cash flow:

Accepted Answer

A) is not a solvency-based measure that helps creditors and investors understand how much discretionary cash flow a company has left from operating activities. 
B) is calculated as cash provided (used)by operating activities plus net capital expenditures and dividends paid. 
C) helps creditors and investors understand how much discretionary cash flow a company has left from its operating activities. 
D) helps to understand how much discretionary cash flow a company has left from its operating activities that can be used to expand operations, increase debt, or pay additional dividends. 
A) is not a solvency-based measure that helps creditors and investors understand how much discretionary cash flow a company has left from operating activities. 
B) is calculated as cash provided (used)by operating activities plus net capital expenditures and dividends paid. 
C) helps creditors and investors understand how much discretionary cash flow a company has left from its operating activities. 
D) helps to understand how much discretionary cash flow a company has left from its operating activities that can be used to expand operations, increase debt, or pay additional dividends.

Question 17

Cost of goods sold + an increase in inventory + an increase in accounts payable = cash paid to suppliers during a period.

Accepted Answer

A) True 
 B)False

Question 18

Use the following information for questions 
Ingles Corp., a private company reporting under ASPE, engaged in the following transactions.For each transaction, indicate where, if at all, it would be classified on the statement of cash flows.
-Retirement of non-current debt (incurred for lending purposes) with cash:

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 19

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

Accepted Answer

A) cash payments to suppliers 
B) cash collections from customers 
C) depreciation expense 
D) cash payments for interest 
A) cash payments to suppliers 
B) cash collections from customers 
C) depreciation expense 
D) cash payments for interest

Question 20

If a company has combined cash equivalents with cash, it must disclose the components of the cash equivalents, with a reconciliation of the amounts reported on the statement of cash flows with those reported on the statement of financial position.

Accepted Answer

A) True 
 B)False

When equipment is sold for cash, the amount received is reflected as a cash

The statement of cash flows

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

Using the indirect method, which of the following would be added to net income?

Under the direct method, an increase in inventory would be added to cost of goods sold to determine net purchases for the period.

In preparing the statement of cash flows, determining the net increase or decrease in cash requires the use of

Dock Inc.reports the following: If cost of goods sold for the year is $128,000, the amount of cash paid to suppliers is

The statement of cash flows will not report the

Under ASPE, the payment of interest on a mortgage payable may be classified as a cash payment from financing activities.

Using the indirect method, which of the following adjustments to convert net income to net cash provided by operating activities is incorrect?

On the statement of cash flows of a growing company, the reader should expect to see cash provided by its financing activities, not cash used.

During the year, Tristan Inc.reported a $6,000 increase in Inventory and a $4,000 increase in Accounts Payable.Cost of goods sold for the year was $125,000.What were the cash payments made to suppliers during the year?

A loss on sale of equipment is included in the investing activities on the statement of cash flows.

If a gain of $30,000 is incurred in selling (for cash) office equipment that cost $120,000 and had accumulated depreciation of $40,000, the total amount reported in investing activities is

Free cash flow:

Cost of goods sold + an increase in inventory + an increase in accounts payable = cash paid to suppliers during a period.

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

If a company has combined cash equivalents with cash, it must disclose the components of the cash equivalents, with a reconciliation of the amounts reported on the statement of cash flows with those reported on the statement of financial position.

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Performance Measurement

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Exam 13: Statement of Cash Flows

When equipment is sold for cash, the amount received is reflected as a cash

The statement of cash flows

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

Using the indirect method, which of the following would be added to net income?

Under the direct method, an increase in inventory would be added to cost of goods sold to determine net purchases for the period.

In preparing the statement of cash flows, determining the net increase or decrease in cash requires the use of

Dock Inc.reports the following: If cost of goods sold for the year is $128,000, the amount of cash paid to suppliers is

The statement of cash flows will not report the

Under ASPE, the payment of interest on a mortgage payable may be classified as a cash payment from financing activities.

Using the indirect method, which of the following adjustments to convert net income to net cash provided by operating activities is incorrect?

On the statement of cash flows of a growing company, the reader should expect to see cash provided by its financing activities, not cash used.

During the year, Tristan Inc.reported a $6,000 increase in Inventory and a $4,000 increase in Accounts Payable.Cost of goods sold for the year was $125,000.What were the cash payments made to suppliers during the year?

A loss on sale of equipment is included in the investing activities on the statement of cash flows.

If a gain of $30,000 is incurred in selling (for cash) office equipment that cost $120,000 and had accumulated depreciation of $40,000, the total amount reported in investing activities is

Free cash flow:

Cost of goods sold + an increase in inventory + an increase in accounts payable = cash paid to suppliers during a period.

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

If a company has combined cash equivalents with cash, it must disclose the components of the cash equivalents, with a reconciliation of the amounts reported on the statement of cash flows with those reported on the statement of financial position.

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Performance Measurement

Filters