Question 1

The order of presentation of activities on the cash flow statement is

Accepted Answer

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

Question 2

Financing activities include the purchasing and disposing of investments and long-lived assets and lending money and collecting the loans.

Accepted Answer

A) True 
 B)False

Question 3

Match between columns
                        Premises: Declaration and payment of a cash dividend
Retirement of bonds at maturity for cash
Increase in merchandise inventory during a period
Proceeds from sale of equipment at carrying amount
Decrease in accounts receivable during a period
Issue of common shares for cash
Decrease in accounts payable during a period
Loss on sale of land
Acquisition of land in exchange for common shares
Purchase of a building for cash

Accepted Answer

The Answer of Cash outflow-investing activity and Cash outflow-financing activity is...

Question 4

Significant noncash transactions would NOT include

Accepted Answer

A)  conversion of bonds into common shares. 
B)  asset acquisition through issue of note payable. 
C)  reacquisition of common shares. 
D)  exchange of property, plant, and equipment. 
A)  conversion of bonds into common shares. 
B)  asset acquisition through issue of note payable. 
C)  reacquisition of common shares. 
D)  exchange of property, plant, and equipment.

Question 5

Which of the following adjustments to convert profit to net cash provided by operating activities is correct?

Accepted Answer

The answer of Which of the following adjustments to convert...

Question 6

In developing the cash flows from operating activities, most companies in Canada prefer to

Accepted Answer

A)  use the direct method. 
B)  use the indirect method. 
C)  present both the indirect and direct methods in their financial reports. 
D)  prepare the operating activities section on the accrual basis. 
A)  use the direct method. 
B)  use the indirect method. 
C)  present both the indirect and direct methods in their financial reports. 
D)  prepare the operating activities section on the accrual basis.

Question 7

Match between columns
                        Premises: Purchase of land for cash
Decrease in merchandise inventory during a period
Conversion of bonds into common shares
Declaration and payment of a cash dividend
Decrease in accounts payable during a period
Issue of preferred shares for cash
Loss on sale of land
Depreciation expense
Decrease in accounts receivable during a period
Sale of equipment for cash at carrying amount

Accepted Answer

The Answer of Deducted in determining cash payments to suppliers is...

Question 8

Which one of the following items is NOT generally used in preparing a cash flow statement?

Accepted Answer

A)  Statement of comprehensive income 
B)  Comparative balance sheets 
C)  Current income statement 
D)  Additional information 
A)  Statement of comprehensive income 
B)  Comparative balance sheets 
C)  Current income statement 
D)  Additional information

Question 9

Typical cash payments classified under investing activities include all of the following payments EXCEPT

Accepted Answer

A)  payments to purchase debt or equity investments. 
B)  payments to employees for services. 
C)  payments to purchase property, plant and equipment. 
D)  payments to make loans to other companies. 
A)  payments to purchase debt or equity investments. 
B)  payments to employees for services. 
C)  payments to purchase property, plant and equipment. 
D)  payments to make loans to other companies.

Question 10

When accounts receivable decrease during the year, more cash was collected during the period than was recorded as revenue.

Accepted Answer

A) True 
 B)False

Question 11

In preparing the net cash provided by operating activities, profit must first be converted from a cash basis to an accrual basis.

Accepted Answer

A) True 
 B)False

Question 12

The use of cash to purchase cash equivalents would be reported on the cash flow statement as an investing activity.

Accepted Answer

A) True 
 B)False

Question 13

The income statement of Meaney Inc. for the year ended December 31, 2014, reported the following condensed information:   Meaney's balance sheet contained the following comparative data at December 31: $\begin{array}{rr}&2014&2013\
\text { Accounts receivable }&\$ 50,000 & \$ 65,000 \
\text { Accounts payable }&35,000 & 30,000 \
\text { Income taxes payable. }&1,000 & 3,000
\end{array}$ Meaney has no depreciable assets. Accounts payable pertains to operating expenses.
Instructions
Prepare the operating activities section of the cash flow statement, using the direct method.

Accepted Answer

The answer of The income statement of Meaney Inc. for...

Question 14

The payment of a cash dividend by a company reporting under ASPE will result in a reduction of the amount of cash provided by financing activities.

Accepted Answer

A) True 
 B)False

Question 15

A $10,000 increase in accounts payable combined with a $4,000 decrease in inventory will cause the cash payments to suppliers to

Accepted Answer

A)  increase by $10,000. 
B)  increase by $4,000. 
C)  increase by $6,000. 
D)  decrease by $14,000. 
A)  increase by $10,000. 
B)  increase by $4,000. 
C)  increase by $6,000. 
D)  decrease by $14,000.

Question 16

The following information is taken from the financial statements for two competing companies in the same industry:   Instructions
Calculate the free cash flow for each company. Explain the significance of this figure in evaluating the relative financial strength of the two companies.

Accepted Answer

Free cash flow
Northern $1,220,000 − $50

Question 17

Prince Incorporated reported profit of $250,000 for the current year. Depreciation recorded on buildings and equipment amounted to $80,000 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows:   Instructions
Prepare the operating activities section of the cash flow statement, using the indirect method.

Accepted Answer

The answer of Prince Incorporated reported profit of $250,000 for...

Question 18

Cash payments for operating expenses is increased by a(n)

Accepted Answer

A)  increase in prepaid expenses. 
B)  decrease in prepaid expenses. 
C)  increase in accrued expenses payable. 
D)  increase in accounts payable. 
A)  increase in prepaid expenses. 
B)  decrease in prepaid expenses. 
C)  increase in accrued expenses payable. 
D)  increase in accounts payable.

Question 19

A comparative income statement is required in order to prepare a cash flow statement.

Accepted Answer

A) True 
 B)False

Question 20

The cash flow statement classifies cash receipts and cash payments into three types of activities. Which of the following is considered one of the activities reported in the cash flow statement?

Accepted Answer

A)  revenue generating activities 
B)  promoting activities 
C)  financing activities 
D)  expansion activities 
A)  revenue generating activities 
B)  promoting activities 
C)  financing activities 
D)  expansion activities

The order of presentation of activities on the cash flow statement is

Financing activities include the purchasing and disposing of investments and long-lived assets and lending money and collecting the loans.

Significant noncash transactions would NOT include

Which of the following adjustments to convert profit to net cash provided by operating activities is correct?

In developing the cash flows from operating activities, most companies in Canada prefer to

Which one of the following items is NOT generally used in preparing a cash flow statement?

Typical cash payments classified under investing activities include all of the following payments EXCEPT

When accounts receivable decrease during the year, more cash was collected during the period than was recorded as revenue.

In preparing the net cash provided by operating activities, profit must first be converted from a cash basis to an accrual basis.

The use of cash to purchase cash equivalents would be reported on the cash flow statement as an investing activity.

The payment of a cash dividend by a company reporting under ASPE will result in a reduction of the amount of cash provided by financing activities.

A $10,000 increase in accounts payable combined with a $4,000 decrease in inventory will cause the cash payments to suppliers to

The following information is taken from the financial statements for two competing companies in the same industry: Instructions Calculate the free cash flow for each company. Explain the significance of this figure in evaluating the relative financial strength of the two companies.

Cash payments for operating expenses is increased by a(n)

A comparative income statement is required in order to prepare a cash flow statement.

The cash flow statement classifies cash receipts and cash payments into three types of activities. Which of the following is considered one of the activities reported in the cash flow statement?

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

The order of presentation of activities on the cash flow statement is

Financing activities include the purchasing and disposing of investments and long-lived assets and lending money and collecting the loans.

Significant noncash transactions would NOT include

Which of the following adjustments to convert profit to net cash provided by operating activities is correct?

In developing the cash flows from operating activities, most companies in Canada prefer to

Which one of the following items is NOT generally used in preparing a cash flow statement?

Typical cash payments classified under investing activities include all of the following payments EXCEPT

When accounts receivable decrease during the year, more cash was collected during the period than was recorded as revenue.

In preparing the net cash provided by operating activities, profit must first be converted from a cash basis to an accrual basis.

The use of cash to purchase cash equivalents would be reported on the cash flow statement as an investing activity.

The payment of a cash dividend by a company reporting under ASPE will result in a reduction of the amount of cash provided by financing activities.

A $10,000 increase in accounts payable combined with a $4,000 decrease in inventory will cause the cash payments to suppliers to

The following information is taken from the financial statements for two competing companies in the same industry: Instructions Calculate the free cash flow for each company. Explain the significance of this figure in evaluating the relative financial strength of the two companies.

Cash payments for operating expenses is increased by a(n)

A comparative income statement is required in order to prepare a cash flow statement.

The cash flow statement classifies cash receipts and cash payments into three types of activities. Which of the following is considered one of the activities reported in the cash flow statement?

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