Question 1

Payment of Dividends is considered:

Accepted Answer

A)  an outflow of cash under Financing activities. 
B)  an inflow of cash under Financing activities. 
C)  an outflow of cash under Investing activities. 
D)  an outflow of cash under Operating activities. 
A)  an outflow of cash under Financing activities. 
B)  an inflow of cash under Financing activities. 
C)  an outflow of cash under Investing activities. 
D)  an outflow of cash under Operating activities.

Question 2

Sears Inc.'s Net Income was $56,000. Other accounts that changed included: Accounts Receivable decreased by $25,000; Merchandise Inventory increased by $15,000; Accounts Payable increased by $4,400; and Salaries Payable increased by $6,200. The amount of Net Cash Flow from Operating Activities using the indirect method is:

Accepted Answer

A)  $76,600. 
B)  $81,000. 
C)  $50,600. 
D)  $26,600. 
A)  $76,600. 
B)  $81,000. 
C)  $50,600. 
D)  $26,600.

Question 3

Under the indirect method, which of the following is NOT a proper adjustment to net income to arrive at net cash flow from operations?

Accepted Answer

A)  Adding a decrease in inventory 
B)  Adding an increase in prepaid expense 
C)  Adding an increase in salaries payable 
D)  All are proper adjustments to net income. 
A)  Adding a decrease in inventory 
B)  Adding an increase in prepaid expense 
C)  Adding an increase in salaries payable 
D)  All are proper adjustments to net income.

Question 4

Which of the following is considered a cash inflow?

Accepted Answer

A)  Decrease in Accounts Payable 
B)  Increase in Accounts Receivable 
C)  Increase in Prepaid Expenses 
D)  Decrease in Accounts Receivable 
A)  Decrease in Accounts Payable 
B)  Increase in Accounts Receivable 
C)  Increase in Prepaid Expenses 
D)  Decrease in Accounts Receivable

Question 5

For each of the following items, indicate (by placing an X) whether the item would be found on the statement of cash flows in column 1, the direct approach for determining the cash flows from operating activities, column 2, the indirect approach for determining the cash flows from operating activities, column 3, cash flows from investing activities, column 4, cash flows from financing activities. If you identify that an item affects the cash flows from operation, indirect method, also indicate whether it will be increasing (+) or decreasing (-) the cash flows.
-

Accepted Answer

The answer of For each of the following items, indicate...

Question 6

Big Toy Corporation's records show net income of $30,000; depreciation expense of $12,000; and cash dividends declared and paid of $1,000. The amount of cash provided by operating activities using the indirect method is:

Accepted Answer

A)  $43,000. 
B)  $42,000. 
C)  $30,000. 
D)  $18,000. 
A)  $43,000. 
B)  $42,000. 
C)  $30,000. 
D)  $18,000.

Question 7

Activities that pay taxes are:

Accepted Answer

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

Question 8

The cash flows from operating activities are reported by the direct method on the statement of cash flows. Determine the following:
a. If sales for the current year were $800,000 and accounts receivable increased $36,000 during the year, what was the amount of cash received from customers?
b. If sales salaries expense for the current years was $110,000 and sales salaries payable decreased $30,000 during the year, what was the amount of cash payments for sales salaries?

Accepted Answer

a. $764,00

Question 9

In the statement of cash flows (indirect method), which event would cause cash flow from operations to decrease?

Accepted Answer

A)  An increase in Inventory 
B)  A decrease in Prepaid Insurance 
C)  An increase in Accounts Payable 
D)  A decrease in Accounts Receivable 
A)  An increase in Inventory 
B)  A decrease in Prepaid Insurance 
C)  An increase in Accounts Payable 
D)  A decrease in Accounts Receivable

Question 10

To determine cash received from customers for the cash flow statement using the direct method, an increase in accounts receivable is added to sales.

Accepted Answer

A) True 
 B)False

Question 11

On the Statement of Cash Flows, direct method, which of the following is a cash inflow from an operating activity?

Accepted Answer

A)  Payment to the bank for a loan 
B)  Collection of an Accounts Receivable 
C)  Payment to buy a piece of equipment 
D)  Paying dividends to stockholders 
A)  Payment to the bank for a loan 
B)  Collection of an Accounts Receivable 
C)  Payment to buy a piece of equipment 
D)  Paying dividends to stockholders

Question 12

Land costing $60,000 was sold for $50,000. What was the effect on the investing activities?

Accepted Answer

A)  Increase $50,000 
B)  Decrease $10,000 
C)  Decrease $50,000 
D)  Increase $10,000 
A)  Increase $50,000 
B)  Decrease $10,000 
C)  Decrease $50,000 
D)  Increase $10,000

Question 13

For each of the following items, indicate (by placing an X) whether the item would be found on the statement of cash flows in column 1, the direct approach for determining the cash flows from operating activities, column 2, the indirect approach for determining the cash flows from operating activities, column 3, cash flows from investing activities, column 4, cash flows from financing activities. If you identify that an item affects the cash flows from operation, indirect method, also indicate whether it will be increasing (+) or decreasing (-) the cash flows.
-

Accepted Answer

The answer of For each of the following items, indicate...

Question 14

Of the following, which has a positive effect on the computation of cash flow from financing using the indirect method?

Accepted Answer

A)  Increase to Dividends 
B)  Increase in Accounts Payable 
C)  Issuing Common Stock 
D)  Sale of Equipment 
A)  Increase to Dividends 
B)  Increase in Accounts Payable 
C)  Issuing Common Stock 
D)  Sale of Equipment

Question 15

The statement of cash flows can be used for evaluating, comparing, and predicting future cash flows.

Accepted Answer

A) True 
 B)False

Question 16

Of the following, which has a positive effect on the computation of cash flow from operations using the indirect method?

Accepted Answer

A)  Decrease in Inventory 
B)  Increase in Accounts Payable 
C)  Increase in Accounts Receivable 
D)  Increase in Prepaid Insurance 
A)  Decrease in Inventory 
B)  Increase in Accounts Payable 
C)  Increase in Accounts Receivable 
D)  Increase in Prepaid Insurance

Question 17

The following information is given for Arizona Company:   The indirect method is used.
Required:
Answer the following questions with the information provided above.
a) The cash flow from operating activities is ________.
b) The cash flow from investing activities is ________.
c) The cash flow from financing activities is ________.

Accepted Answer

a) $32,000 + 6,000 -

Question 18

Issuing Common Stock is considered a financing activity.

Accepted Answer

A) True 
 B)False

Question 19

The records of Ashley Boutique showed Net Loss, $30,000 Depreciation Expense, $21,000 and decrease in Supplies on Hand, $25,000. The amount of Net Cash Flow from Operating Activities using the indirect method is:

Accepted Answer

A)  $34,000. 
B)  $16,000. 
C)  -$16,000. 
D)  -$34,000. 
A)  $34,000. 
B)  $16,000. 
C)  -$16,000. 
D)  -$34,000.

Question 20

Under the direct method of the statement of cash flows, cash paid for salaries would result in:

Accepted Answer

A)  a decrease of cash flow from operating activities. 
B)  a decrease of cash flow from investing activities. 
C)  an increase of cash flow from financing activities. 
D)  a decrease of cash flow from financing activities. 
A)  a decrease of cash flow from operating activities. 
B)  a decrease of cash flow from investing activities. 
C)  an increase of cash flow from financing activities. 
D)  a decrease of cash flow from financing activities.

Payment of Dividends is considered:

Under the indirect method, which of the following is NOT a proper adjustment to net income to arrive at net cash flow from operations?

Which of the following is considered a cash inflow?

Big Toy Corporation's records show net income of $30,000; depreciation expense of $12,000; and cash dividends declared and paid of $1,000. The amount of cash provided by operating activities using the indirect method is:

Activities that pay taxes are:

In the statement of cash flows (indirect method), which event would cause cash flow from operations to decrease?

To determine cash received from customers for the cash flow statement using the direct method, an increase in accounts receivable is added to sales.

On the Statement of Cash Flows, direct method, which of the following is a cash inflow from an operating activity?

Land costing $60,000 was sold for $50,000. What was the effect on the investing activities?

Of the following, which has a positive effect on the computation of cash flow from financing using the indirect method?

The statement of cash flows can be used for evaluating, comparing, and predicting future cash flows.

Of the following, which has a positive effect on the computation of cash flow from operations using the indirect method?

Issuing Common Stock is considered a financing activity.

The records of Ashley Boutique showed Net Loss, $30,000 Depreciation Expense, $21,000 and decrease in Supplies on Hand, $25,000. The amount of Net Cash Flow from Operating Activities using the indirect method is:

Under the direct method of the statement of cash flows, cash paid for salaries would result in:

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying, Recording, and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property, Plant, Equipment, and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values, Dividends, Treasury Stocks,

Corporations and Bonds Payable

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters

Exam 21: Statement of Cash Flows

Payment of Dividends is considered:

Under the indirect method, which of the following is NOT a proper adjustment to net income to arrive at net cash flow from operations?

Which of the following is considered a cash inflow?

Big Toy Corporation's records show net income of $30,000; depreciation expense of $12,000; and cash dividends declared and paid of $1,000. The amount of cash provided by operating activities using the indirect method is:

Activities that pay taxes are:

In the statement of cash flows (indirect method), which event would cause cash flow from operations to decrease?

To determine cash received from customers for the cash flow statement using the direct method, an increase in accounts receivable is added to sales.

On the Statement of Cash Flows, direct method, which of the following is a cash inflow from an operating activity?

Land costing $60,000 was sold for $50,000. What was the effect on the investing activities?

Of the following, which has a positive effect on the computation of cash flow from financing using the indirect method?

The statement of cash flows can be used for evaluating, comparing, and predicting future cash flows.

Of the following, which has a positive effect on the computation of cash flow from operations using the indirect method?

Issuing Common Stock is considered a financing activity.

The records of Ashley Boutique showed Net Loss, $30,000 Depreciation Expense, $21,000 and decrease in Supplies on Hand, $25,000. The amount of Net Cash Flow from Operating Activities using the indirect method is:

Under the direct method of the statement of cash flows, cash paid for salaries would result in:

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying, Recording, and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property, Plant, Equipment, and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values, Dividends, Treasury Stocks,

Corporations and Bonds Payable

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters