Question 1

Only cash flow transactions are presented in the statement of cash flows, including supporting schedules.

Accepted Answer

A) True 
 B)False  False

Question 2

Which of the following accounts will not be considered when computing cash flow from operations?

Accepted Answer

A)  accounts receivable 
B)  inventories 
C)  equipment 
D)  accounts payable 
E)  taxes payable 
A)  accounts receivable 
B)  inventories 
C)  equipment 
D)  accounts payable 
E)  taxes payable C

Question 3

Which of the following should not be considered as part of "cash and cash equivalents"?

Accepted Answer

A)  cash on hand 
B)  cash on deposit 
C)  highly liquid investments 
D)  investments in short-term securities (<90 day maturity) 
E)  cash restricted for retirement of bonds 
A)  cash on hand 
B)  cash on deposit 
C)  highly liquid investments 
D)  investments in short-term securities (<90 day maturity) 
E)  cash restricted for retirement of bonds E

Question 4

Which of the following is not a typical cash flow under investing activities?

Accepted Answer

A)  cash inflow from receipt of loans 
B)  cash inflow from sale of property, plant, and equipment 
C)  cash outflow for payment of amounts borrowed 
D)  cash outflow for loans to other entities 
E)  cash outflow for purchase of property, plant, and equipment 
A)  cash inflow from receipt of loans 
B)  cash inflow from sale of property, plant, and equipment 
C)  cash outflow for payment of amounts borrowed 
D)  cash outflow for loans to other entities 
E)  cash outflow for purchase of property, plant, and equipment

Question 5

Which of the following is not a typical cash flow under financing activities?

Accepted Answer

A)  cash inflow from sale of equity securities 
B)  cash inflow from sale of bonds 
C)  cash outflow for payment of dividends 
D)  cash outflow for loans to other entities 
E)  cash outflow for payment of amounts borrowed 
A)  cash inflow from sale of equity securities 
B)  cash inflow from sale of bonds 
C)  cash outflow for payment of dividends 
D)  cash outflow for loans to other entities 
E)  cash outflow for payment of amounts borrowed

Question 6

The statement of cash flows became a required statement in which year?

Accepted Answer

A)  1995 
B)  1978 
C)  1971 
D)  1987 
E)  1993 
A)  1995 
B)  1978 
C)  1971 
D)  1987 
E)  1993

Question 7

The retirement of debt by the issuance of common stock should be presented in a statement of cash flows in which of the following sections?

Accepted Answer

A)  supplemental schedule of noncash investing and financing activities 
B)  cash flows from operating activities 
C)  cash flows from investing activities 
D)  cash flows from financing activities 
E)  supplemental schedule to reconcile net income to net cash provided by operations 
A)  supplemental schedule of noncash investing and financing activities 
B)  cash flows from operating activities 
C)  cash flows from investing activities 
D)  cash flows from financing activities 
E)  supplemental schedule to reconcile net income to net cash provided by operations

Question 8

The operating cash flow/current maturities of long-term debt and current notes payable is a ratio that indicates long-term, debt-paying ability.

Accepted Answer

A) True 
 B)False

Question 9

The statement of cash flows is presented on a working capital basis.

Accepted Answer

A) True 
 B)False

Question 10

Management should not use the statement of cash flows for which of the following purposes?

Accepted Answer

A)  To determine dividend policy. 
B)  To determine cash flow from operations. 
C)  To determine cash flow from investing activities. 
D)  To determine cash flow from financing activities. 
E)  To determine the balance in accounts receivable. 
A)  To determine dividend policy. 
B)  To determine cash flow from operations. 
C)  To determine cash flow from investing activities. 
D)  To determine cash flow from financing activities. 
E)  To determine the balance in accounts receivable.

Question 11

Depreciation expense reduces operating income but does not require the use of cash.

Accepted Answer

A) True 
 B)False

Question 12

A cash outflow will be generated by an increase in a liability.

Accepted Answer

A) True 
 B)False

Question 13

The statement of cash flows should be reviewed for several time periods in order to determine the major sources of cash and the major uses of cash.

Accepted Answer

A) True 
 B)False

Question 14

Working capital is defined as:

Accepted Answer

A)  total assets less intangible assets 
B)  current assets divided by current liabilities 
C)  current assets less current liabilities 
D)  total assets less current assets 
E)  current assets less liabilities 
A)  total assets less intangible assets 
B)  current assets divided by current liabilities 
C)  current assets less current liabilities 
D)  total assets less current assets 
E)  current assets less liabilities

Question 15

Within an individual account, there may be an explanation of both a source and a use of cash.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is not a purpose of the statement of cash flows?

Accepted Answer

A)  To show cash flow from operations. 
B)  To show cash flow from financing activities. 
C)  To show cash flow from investing activities. 
D)  To show all investing and financing transactions. 
E)  To show operating expenses for a period of time. 
A)  To show cash flow from operations. 
B)  To show cash flow from financing activities. 
C)  To show cash flow from investing activities. 
D)  To show all investing and financing transactions. 
E)  To show operating expenses for a period of time.

Question 17

Cash flow per share is a better indication of a firm's ability to make capital expenditure decisions and pay dividends than is earnings per share.

Accepted Answer

A) True 
 B)False

Question 18

Francis Company had operating expenses of $20,000 and depreciation expenses of $4,000.Assuming no other transactions, what was the cash paid for operating expenses?

Accepted Answer

A)  $24,000 
B)  $22,000 
C)  $16,000 
D)  $20,400 
E)  $23,000 
A)  $24,000 
B)  $22,000 
C)  $16,000 
D)  $20,400 
E)  $23,000

Question 19

Which of the following is not a typical cash flow under operating activities?

Accepted Answer

A)  cash inflows from sale of goods or services 
B)  cash inflows from interest 
C)  cash outflows to employees 
D)  cash outflows to suppliers 
E)  cash inflows from sale of property, plant, and equipment 
A)  cash inflows from sale of goods or services 
B)  cash inflows from interest 
C)  cash outflows to employees 
D)  cash outflows to suppliers 
E)  cash inflows from sale of property, plant, and equipment

Question 20

A supporting schedule to the statement of cash flows may include noncash flow items.

Accepted Answer

A) True 
 B)False

Only cash flow transactions are presented in the statement of cash flows, including supporting schedules.

Which of the following accounts will not be considered when computing cash flow from operations?

Which of the following should not be considered as part of "cash and cash equivalents"?

Which of the following is not a typical cash flow under investing activities?

Which of the following is not a typical cash flow under financing activities?

The statement of cash flows became a required statement in which year?

The retirement of debt by the issuance of common stock should be presented in a statement of cash flows in which of the following sections?

The operating cash flow/current maturities of long-term debt and current notes payable is a ratio that indicates long-term, debt-paying ability.

The statement of cash flows is presented on a working capital basis.

Management should not use the statement of cash flows for which of the following purposes?

Depreciation expense reduces operating income but does not require the use of cash.

A cash outflow will be generated by an increase in a liability.

The statement of cash flows should be reviewed for several time periods in order to determine the major sources of cash and the major uses of cash.

Working capital is defined as:

Within an individual account, there may be an explanation of both a source and a use of cash.

Which of the following is not a purpose of the statement of cash flows?

Cash flow per share is a better indication of a firm's ability to make capital expenditure decisions and pay dividends than is earnings per share.

Francis Company had operating expenses of $20,000 and depreciation expenses of $4,000.Assuming no other transactions, what was the cash paid for operating expenses?

Which of the following is not a typical cash flow under operating activities?

A supporting schedule to the statement of cash flows may include noncash flow items.

Introduction to Financial Reporting

Introduction to Financial Statements and Other Financial Reporting Topics

Balance Sheet

Income Statement

Basics of Analysis

Liquidity of Short-Term Assets; Related Debt-Paying Ability

Long-Term Debt-Paying Ability

Profitability

For the Investor

Expanded Analysis

Special Industries: Banks, Utilities, Oil and Gas, Transportation, Insurance, Real Estate Companies

Personal Financial Statements and Accounting for Governments and Not-For-Profit Organizations

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Exam 10: Statement of Cash Flows

Only cash flow transactions are presented in the statement of cash flows, including supporting schedules.

Which of the following accounts will not be considered when computing cash flow from operations?

Which of the following should not be considered as part of "cash and cash equivalents"?

Which of the following is not a typical cash flow under investing activities?

Which of the following is not a typical cash flow under financing activities?

The statement of cash flows became a required statement in which year?

The retirement of debt by the issuance of common stock should be presented in a statement of cash flows in which of the following sections?

The operating cash flow/current maturities of long-term debt and current notes payable is a ratio that indicates long-term, debt-paying ability.

The statement of cash flows is presented on a working capital basis.

Management should not use the statement of cash flows for which of the following purposes?

Depreciation expense reduces operating income but does not require the use of cash.

A cash outflow will be generated by an increase in a liability.

The statement of cash flows should be reviewed for several time periods in order to determine the major sources of cash and the major uses of cash.

Working capital is defined as:

Within an individual account, there may be an explanation of both a source and a use of cash.

Which of the following is not a purpose of the statement of cash flows?

Cash flow per share is a better indication of a firm's ability to make capital expenditure decisions and pay dividends than is earnings per share.

Francis Company had operating expenses of $20,000 and depreciation expenses of $4,000.Assuming no other transactions, what was the cash paid for operating expenses?

Which of the following is not a typical cash flow under operating activities?

A supporting schedule to the statement of cash flows may include noncash flow items.

Introduction to Financial Reporting

Introduction to Financial Statements and Other Financial Reporting Topics

Balance Sheet

Income Statement

Basics of Analysis

Liquidity of Short-Term Assets; Related Debt-Paying Ability

Long-Term Debt-Paying Ability

Profitability

For the Investor

Expanded Analysis

Special Industries: Banks, Utilities, Oil and Gas, Transportation, Insurance, Real Estate Companies

Personal Financial Statements and Accounting for Governments and Not-For-Profit Organizations

Filters