Question 1

In addition to the three basic financial statements, which of the following is also a required financial statement?

Accepted Answer

A)  The Cash Budget. 
B)  Statement of Cash Flows. 
C)  Statement of Cash Inflows and Outflows. 
D)  The Cash Reconciliation. 
A)  The Cash Budget. 
B)  Statement of Cash Flows. 
C)  Statement of Cash Inflows and Outflows. 
D)  The Cash Reconciliation.

Question 2

Laser Performance Inc. has the following information available (amount in thousands). $$\begin{array} { l r } 
\text { Net Income } & \$ 30,000 \
\text { Average Total Liabilities } & 80,000 \
\text { Average Current Liabilities } & 36,000 \
\text { Cash Provided by Operations } & 48,000 \
\text { Cash Sales } & 130,000 \
\text { Capital Expenditures } & 22,000 \
\text { Dividends Paid } & 6,000
\end{array}$$ What is the cash debt coverage?

Accepted Answer

A)  .375 times. 
B)  1.33 times. 
C)  .600 times. 
D)  1.625 times. 
A)  .375 times. 
B)  1.33 times. 
C)  .600 times. 
D)  1.625 times.

Question 3

Cash generated from operations exceeds investing needs, and the company can begin retiring debt 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 4

In computing cash payments for operating expenses, a decrease in prepaid expenses is ______________ and an increase in accrued expenses payable is ______________ to (from) operating expenses, exclusive of depreciation.

Accepted Answer

The answer of In computing cash payments for operating expenses,...

Question 5

The net income reported on the income statement for the current year was $1,260,000. Depreciation recorded on plant assets was $257,000. Accounts receivable and inventories increased by $72,000 and $48,000, respectively. Prepaid expenses and accounts payable decreased by $6,000 and $66,000, respectively. How much cash was provided by operating activities?

Accepted Answer

A)  $1,280,000. 
B)  $1,400,000. 
C)  $1,337,000. 
D)  $1,697,000. 
A)  $1,280,000. 
B)  $1,400,000. 
C)  $1,337,000. 
D)  $1,697,000.

Question 6

The following information relates to Layline Company: $\begin{array}{lr}
\text { Prepaid Insurance, December 31, } 2013 & \$ 302,000 \
\text { Prepaid Insurance, December 31, } 2014 & 280,000 \
\text { Insurance expense for 2014 } & 1,400,000
\end{array}$ Using the direct method of reporting cash flows from operating activities, what was the amount of cash paid for insurance premiums by Layline during 2014?

Accepted Answer

A)  $1,378,000. 
B)  $1,422,000. 
C)  $1,680,000. 
D)  $1,422,000 
A)  $1,378,000. 
B)  $1,422,000. 
C)  $1,680,000. 
D)  $1,422,000

Question 7

Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows. Indicate where, if at all, long-term debt retired with cash 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 8

If a loss of $9,000 is incurred in selling (for cash) office equipment having a book value of $80,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

Accepted Answer

A)  $71,000. 
B)  $80,000. 
C)  $89,000. 
D)  $9,000. 
A)  $71,000. 
B)  $80,000. 
C)  $89,000. 
D)  $9,000.

Question 9

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 10

North Company has other operating expenses of $330,000. There has been a decrease in prepaid expenses of $16,000 during the year, and accrued liabilities are $24,000 larger than in the prior period. Using the direct method of reporting cash flows from operating activities, what were North's cash payments for operating expenses?

Accepted Answer

A)  $338,000. 
B)  $322,000. 
C)  $290,000. 
D)  $370,000. 
A)  $338,000. 
B)  $322,000. 
C)  $290,000. 
D)  $370,000.

Question 11

The phase in the product life cycle when a company is purchasing fixed assets and beginning to produce and sell is 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 12

Generally, the most important category on the statement of cash flows is cash flows from

Accepted Answer

A)  operating activities. 
B)  investing activities. 
C)  financing activities. 
D)  significant noncash activities. 
A)  operating activities. 
B)  investing activities. 
C)  financing activities. 
D)  significant noncash activities.

Question 13

The current sections of Magic Marine Inc.'s balance sheets at December 31, 2013 and 2014, are presented here.
Magic Marine 's net income for 2014 was $216,000. Depreciation expense was $34,000.  
 Instructions
Prepare the net cash provided by operating activities section of the company's statement of cash flows for the year ended December 31, 2014, using the indirect method.

Accepted Answer

The answer of The current sections of Magic Marine Inc.'s...

Question 14

The payment of interest on bonds payable is classified as a cash outflow from operating activities.

Accepted Answer

A) True 
 B)False

Question 15

Selected transactions of the Carolina Company are listed below.
1. Common stock is sold for cash above par value.
2. Bonds payable are issued for cash at a discount.
3. Interest on a short-term note receivable is collected.
4. Merchandise is sold to customers for cash.
5. Cash is paid to purchase inventory.
6. Equipment is purchased by signing a 3-year, 10% note payable.
7. Cash dividends on common stock are declared and paid.
8. One hundred shares of Amazon.com common stock are purchased for cash.
9. Land is sold for cash at book value.
10. Bonds payable are converted into common stock.
Instructions
Classify each transaction as either (a) an operating activity, (b) an investing activity, (c) a financing activity, or (d) a noncash investing and financing activity.

Accepted Answer

1. (c) Financing activity 6. (d) Noncash

Question 16

APS Company issued 15,000 shares of $1 par common stock for $40 per share during 2014. The company paid dividends of $36,000 and issued long-term notes payable of $330,000 during the year. What amount of cash flows from financing activities will be reported on the statement of cash flows?

Accepted Answer

A)  $9,000 net cash inflow. 
B)  $264,000 net cash inflow. 
C)  $705,000 net cash outflow. 
D)  $894,000 net cash inflow. 
A)  $9,000 net cash inflow. 
B)  $264,000 net cash inflow. 
C)  $705,000 net cash outflow. 
D)  $894,000 net cash inflow.

Question 17

Minette Company reported net income of $120,000 for the year ended December 31, 2014. During the year, inventories decreased by $24,000, accounts payable decreased by $36,000, depreciation expense was $27,000 and a gain on disposal of equipment of $9,000 was recorded. Net cash provided by operating activities in 2014 using the indirect method was

Accepted Answer

A)  $168,000. 
B)  $126,000. 
C)  $147,000. 
D)  $144.000. 
A)  $168,000. 
B)  $126,000. 
C)  $147,000. 
D)  $144.000.

Question 18

In computing cash payments for income taxes, a decrease in income taxes payable is ______________ to (from) income tax expense.

Accepted Answer

The answer of In computing cash payments for income taxes,...

Question 19

Hunter Company reported a net loss of $6,000 for the year ended December 31, 2014. During the year, accounts receivable decreased $14,000, inventory increased $10,000, accounts payable increased by $15,000, and depreciation expense of $12,000 was recorded. During 2014, operating activities

Accepted Answer

A)  used net cash of $7,000. 
B)  used net cash of $25,000. 
C)  provided net cash of $25,000. 
D)  provided net cash of $37,000. 
A)  used net cash of $7,000. 
B)  used net cash of $25,000. 
C)  provided net cash of $25,000. 
D)  provided net cash of $37,000.

Question 20

Analysis of the changes in all of the noncash balance sheet accounts will explain the change in the Cash account.

Accepted Answer

A) True 
 B)False

In addition to the three basic financial statements, which of the following is also a required financial statement?

Cash generated from operations exceeds investing needs, and the company can begin retiring debt during the

In computing cash payments for operating expenses, a decrease in prepaid expenses is and an increase in accrued expenses payable is to (from) operating expenses, exclusive of depreciation.

Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows. Indicate where, if at all, long-term debt retired with cash would be classified on the statement of cash flows.

If a loss of $9,000 is incurred in selling (for cash) office equipment having a book value of $80,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

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

The phase in the product life cycle when a company is purchasing fixed assets and beginning to produce and sell is the

Generally, the most important category on the statement of cash flows is cash flows from

The payment of interest on bonds payable is classified as a cash outflow from operating activities.

APS Company issued 15,000 shares of $1 par common stock for $40 per share during 2014. The company paid dividends of $36,000 and issued long-term notes payable of $330,000 during the year. What amount of cash flows from financing activities will be reported on the statement of cash flows?

In computing cash payments for income taxes, a decrease in income taxes payable is ______________ to (from) income tax expense.

Hunter Company reported a net loss of $6,000 for the year ended December 31, 2014. During the year, accounts receivable decreased $14,000, inventory increased $10,000, accounts payable increased by $15,000, and depreciation expense of $12,000 was recorded. During 2014, operating activities

Analysis of the changes in all of the noncash balance sheet accounts will explain the change in the Cash account.

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 and Acquisitions in Accounting

Filters

Exam 12: Statement of Cash Flows

In addition to the three basic financial statements, which of the following is also a required financial statement?

Cash generated from operations exceeds investing needs, and the company can begin retiring debt during the

In computing cash payments for operating expenses, a decrease in prepaid expenses is ______________ and an increase in accrued expenses payable is ______________ to (from) operating expenses, exclusive of depreciation.

Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows. Indicate where, if at all, long-term debt retired with cash would be classified on the statement of cash flows.

If a loss of $9,000 is incurred in selling (for cash) office equipment having a book value of $80,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

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

The phase in the product life cycle when a company is purchasing fixed assets and beginning to produce and sell is the

Generally, the most important category on the statement of cash flows is cash flows from

The payment of interest on bonds payable is classified as a cash outflow from operating activities.

APS Company issued 15,000 shares of $1 par common stock for $40 per share during 2014. The company paid dividends of $36,000 and issued long-term notes payable of $330,000 during the year. What amount of cash flows from financing activities will be reported on the statement of cash flows?

In computing cash payments for income taxes, a decrease in income taxes payable is ______________ to (from) income tax expense.

Hunter Company reported a net loss of $6,000 for the year ended December 31, 2014. During the year, accounts receivable decreased $14,000, inventory increased $10,000, accounts payable increased by $15,000, and depreciation expense of $12,000 was recorded. During 2014, operating activities

Analysis of the changes in all of the noncash balance sheet accounts will explain the change in the Cash account.

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 and Acquisitions in Accounting

Filters

In computing cash payments for operating expenses, a decrease in prepaid expenses is and an increase in accrued expenses payable is to (from) operating expenses, exclusive of depreciation.