Question 1

When accounts receivable increase during the year, revenues on an accrual basis are lower than revenues on a cash basis.

Accepted Answer

A) True 
 B)False  False

Question 2

Which of the following would decrease net cash provided by operating activities?

Accepted Answer

A)  increase in accounts payable. 
B)  depreciation expense. 
C)  increase in inventory. 
D)  loss on sale of equipment. 
A)  increase in accounts payable. 
B)  depreciation expense. 
C)  increase in inventory. 
D)  loss on sale of equipment. C

Question 3

For companies reporting under ASPE, typical cash payments classified under financing activities will include the following payment

Accepted Answer

A)  to redeem long-term debt or reacquire shares. 
B)  to employees for services. 
C)  to lenders for interest. 
D)  to make loans to other companies. 
A)  to redeem long-term debt or reacquire shares. 
B)  to employees for services. 
C)  to lenders for interest. 
D)  to make loans to other companies. A

Question 4

Rodman Inc. had credit sales of $800,000. The beginning accounts receivable balance was $40,000 and the ending accounts receivable balance was $140,000. What were the cash collections from customers during the period?

Accepted Answer

A)  $900,000 
B)  $800,000 
C)  $700,000 
D)  $840,000 
A)  $900,000 
B)  $800,000 
C)  $700,000 
D)  $840,000

Question 5

In the indirect method of calculating cash flow from operations, depreciation, as a noncash expense, would be added back to profit.

Accepted Answer

A) True 
 B)False

Question 6

The cash flow statement is used to

Accepted Answer

A)  provide information about the investing and financing activities during a period. 
B)  prove that revenues exceed expenses if there is a profit. 
C)  provide information about the cash receipts and cash payments during a period. 
D)  facilitate banking relationships. 
A)  provide information about the investing and financing activities during a period. 
B)  prove that revenues exceed expenses if there is a profit. 
C)  provide information about the cash receipts and cash payments during a period. 
D)  facilitate banking relationships.

Question 7

Under IFRS, cash receipts from interest and dividends are classified as

Accepted Answer

A)  financing activities. 
B)  investing activities. 
C)  operating activities. 
D)  either operating or investing activities. 
A)  financing activities. 
B)  investing activities. 
C)  operating activities. 
D)  either operating or investing activities.

Question 8

Using the indirect method, an increase in accounts payable during a period is deducted from profit in calculating cash provided by operating activities.

Accepted Answer

A) True 
 B)False

Question 9

An increase in a current liability account will be deducted from the net cash provided by operating activities.

Accepted Answer

A) True 
 B)False

Question 10

A comparative balance sheet for Debits Corporation is presented below:  
 Additional information:
1. Loss for 2014 is $20,000.
2. Cash dividends of $4,000 were declared and paid in 2014.
3. Land was sold for cash at a loss of $10,000. This was the only land transaction during the year.
4. Equipment with a cost of $15,000 and accumulated depreciation of $10,000 was sold for $5,000 cash.
5. $12,000 of bonds were retired during the year at carrying value.
6. Equipment was acquired for common shares. The fair value of the equipment at the time of the exchange was $25,000.
Instructions
Prepare a cash flow statement for the year ended 2014, using the indirect method.

Accepted Answer

The answer of A comparative balance sheet for Debits Corporation...

Question 11

Anderson Corporation reported profit of $30,000 for the year. During the year, accounts receivable increased by $7,000, accounts payable decreased by $3,000 and depreciation expense of $5,000 was recorded. Net cash provided by operating activities for the year is

Accepted Answer

A)  $25,000. 
B)  $45,000. 
C)  $29,000. 
D)  $30,000. 
A)  $25,000. 
B)  $45,000. 
C)  $29,000. 
D)  $30,000.

Question 12

All of the following are examples of significant noncash activities EXCEPT

Accepted Answer

A)  issue debt in exchange for assets. 
B)  issue common shares in exchange to purchase assets. 
C)  exchange of property, plant and equipment. 
D)  issuance of bonds for cash to purchase assets. 
A)  issue debt in exchange for assets. 
B)  issue common shares in exchange to purchase assets. 
C)  exchange of property, plant and equipment. 
D)  issuance of bonds for cash to purchase assets.

Question 13

The investing activities are presented in the cash flow statement before the operating and financing activities.

Accepted Answer

A) True 
 B)False

Question 14

The sustainability of a business is linked to its ability to generate cash.

Accepted Answer

A) True 
 B)False

Question 15

When bonds are issued in exchange for land, the cash flow from investing activities would decrease.

Accepted Answer

A) True 
 B)False

Question 16

For the years ended December 31, 2015, and 2014, Janelle Corporation reported the following selected information in its financial statements:   Instructions 
a. Calculate free cash flow for 2015 and 2014.
b. How is it possible that Janelle Corporation can have cash provided by operating activities of $400,000 for 2015 and only report profit of $154,000?
c. Comment on the changes in free cash flow from 2014 to 2015 and suggest how the company might improve its free cash flow in the future.

Accepted Answer

a. Free cash flow = Cash provided by ope

Question 17

Tabador Corporation shows income tax expense of $80,000. There has been a $2,000 increase in income taxes payable during the year. What was Tabador's cash payment for income taxes?

Accepted Answer

A)  $80,000 
B)  $78,000 
C)  $75,000 
D)  $82,000 
A)  $80,000 
B)  $78,000 
C)  $75,000 
D)  $82,000

Question 18

Which of the following statements concerning the cash flow statement is true?

Accepted Answer

A)  The cash flow statement is usually more accurate when using the indirect method. 
B)  A cash flow statement can be prepared using the direct or indirect method. 
C)  The cash flow statement reports earnings per share. 
D)  The cash flow statement is an optional financial statement for external reporting purposes. 
A)  The cash flow statement is usually more accurate when using the indirect method. 
B)  A cash flow statement can be prepared using the direct or indirect method. 
C)  The cash flow statement reports earnings per share. 
D)  The cash flow statement is an optional financial statement for external reporting purposes.

Question 19

On the cash flow statement, cash inflows from the sale of bonds is reported as a(n)

Accepted Answer

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

Question 20

The amount of cash flow from operations will be the same under the indirect method or the direct method.

Accepted Answer

A) True 
 B)False

When accounts receivable increase during the year, revenues on an accrual basis are lower than revenues on a cash basis.

Which of the following would decrease net cash provided by operating activities?

For companies reporting under ASPE, typical cash payments classified under financing activities will include the following payment

Rodman Inc. had credit sales of $800,000. The beginning accounts receivable balance was $40,000 and the ending accounts receivable balance was $140,000. What were the cash collections from customers during the period?

In the indirect method of calculating cash flow from operations, depreciation, as a noncash expense, would be added back to profit.

The cash flow statement is used to

Under IFRS, cash receipts from interest and dividends are classified as

Using the indirect method, an increase in accounts payable during a period is deducted from profit in calculating cash provided by operating activities.

An increase in a current liability account will be deducted from the net cash provided by operating activities.

Anderson Corporation reported profit of $30,000 for the year. During the year, accounts receivable increased by $7,000, accounts payable decreased by $3,000 and depreciation expense of $5,000 was recorded. Net cash provided by operating activities for the year is

All of the following are examples of significant noncash activities EXCEPT

The investing activities are presented in the cash flow statement before the operating and financing activities.

The sustainability of a business is linked to its ability to generate cash.

When bonds are issued in exchange for land, the cash flow from investing activities would decrease.

Tabador Corporation shows income tax expense of $80,000. There has been a $2,000 increase in income taxes payable during the year. What was Tabador's cash payment for income taxes?

Which of the following statements concerning the cash flow statement is true?

On the cash flow statement, cash inflows from the sale of bonds is reported as a(n)

The amount of cash flow from operations will be the same under the indirect method or the direct method.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completion of the Accounting Cycle

Accounting for Merchandising Operations

Inventory Costing

Internal Control and Cash

Long-Lived Assets

Current Liabilities

Accounting Principles

Accounting for Partnerships

Introduction to Corporations

Corporations: Additional Topics and Ifrs

Non-Current Liabilities

Financial Statement Analysis

Investments

Filters

Exam 16: The Cash Flow Statement

When accounts receivable increase during the year, revenues on an accrual basis are lower than revenues on a cash basis.

Which of the following would decrease net cash provided by operating activities?

For companies reporting under ASPE, typical cash payments classified under financing activities will include the following payment

Rodman Inc. had credit sales of $800,000. The beginning accounts receivable balance was $40,000 and the ending accounts receivable balance was $140,000. What were the cash collections from customers during the period?

In the indirect method of calculating cash flow from operations, depreciation, as a noncash expense, would be added back to profit.

The cash flow statement is used to

Under IFRS, cash receipts from interest and dividends are classified as

Using the indirect method, an increase in accounts payable during a period is deducted from profit in calculating cash provided by operating activities.

An increase in a current liability account will be deducted from the net cash provided by operating activities.

Anderson Corporation reported profit of $30,000 for the year. During the year, accounts receivable increased by $7,000, accounts payable decreased by $3,000 and depreciation expense of $5,000 was recorded. Net cash provided by operating activities for the year is

All of the following are examples of significant noncash activities EXCEPT

The investing activities are presented in the cash flow statement before the operating and financing activities.

The sustainability of a business is linked to its ability to generate cash.

When bonds are issued in exchange for land, the cash flow from investing activities would decrease.

Tabador Corporation shows income tax expense of $80,000. There has been a $2,000 increase in income taxes payable during the year. What was Tabador's cash payment for income taxes?

Which of the following statements concerning the cash flow statement is true?

On the cash flow statement, cash inflows from the sale of bonds is reported as a(n)

The amount of cash flow from operations will be the same under the indirect method or the direct method.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completion of the Accounting Cycle

Accounting for Merchandising Operations

Inventory Costing

Internal Control and Cash

Long-Lived Assets

Current Liabilities

Accounting Principles

Accounting for Partnerships

Introduction to Corporations

Corporations: Additional Topics and Ifrs

Non-Current Liabilities

Financial Statement Analysis

Investments

Filters