Question 1

Cash paid to purchase equipment would be classified in what section of the cash flow statement?

Accepted Answer

Investing Activities

Question 2

A cash flow statement starts with profit and adds (or deducts) items on the income statement that did not affect cash to arrive at cash provided by operating activities if the indirect method is used.

Accepted Answer

A) True 
 B)False  True

Question 3

If equipment was sold for $15,000 and a loss of $10,000 was recognized, investing activities would show a cash inflow of $15,000.

Accepted Answer

A) True 
 B)False  True

Question 4

Given the following information, calculate the cash provided (used) by operating activities. You may use either the direct or the indirect method.

Accepted Answer

Direct Met

Question 5

An increase in dividends payable increases net cash provided by operating activities.

Accepted Answer

A) True 
 B)False

Question 6

Assuming the direct method is used for operating activities, complete the following table by indicating the section of the cash flow statement where each item would appear. Use I if the item would be an inflow and O if the item would be an outflow. If the item would not appear, place an X in the last column.

Accepted Answer

The answer of Assuming the direct method is used for...

Question 7

Cash inflows and outflows from investing and financing activities should be reported separately on the cash flow statement.

Accepted Answer

A) True 
 B)False

Question 8

Information for the cash flow statement is taken from the adjusted trial balance.

Accepted Answer

A) True 
 B)False

Question 9

The issue of bonds to acquire land would be shown in the financing section.

Accepted Answer

A) True 
 B)False

Question 10

Purchases of non-current assets are considered cash outflows used by operating activities.

Accepted Answer

A) True 
 B)False

Question 11

Cash inflows from investing activities include:

Accepted Answer

A)  sale of common shares. 
B)  purchase of equipment. 
C)  sale of land. 
D)  issue of long-term debt. 
A)  sale of common shares. 
B)  purchase of equipment. 
C)  sale of land. 
D)  issue of long-term debt.

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

A company has credit sales of $150,000 and cash sales of $90,000 during the same year that the Accounts Receivable account decreased by $20,000. What was the total cash received from customers?

Accepted Answer

A)  $220,000 
B)  $260,000 
C)  $170,000 
D)  $130,000 
A)  $220,000 
B)  $260,000 
C)  $170,000 
D)  $130,000

Question 14

Assuming the indirect method is used for operating activities, complete the following table by indicating the section of the cash flow statement where each item would appear. Use I if the item would be an inflow and O if the item would be an outflow. If the item would not appear, place an X in the last column.

Accepted Answer

The answer of Assuming the indirect method is used for...

Question 15

Noncash investing and financing activities:

Accepted Answer

A)  may represent significant investing and financing activities. 
B)  do not involve cash receipts or cash payments. 
C)  are disclosed in a separate note to the statements. 
D)  All of the above 
A)  may represent significant investing and financing activities. 
B)  do not involve cash receipts or cash payments. 
C)  are disclosed in a separate note to the statements. 
D)  All of the above

Question 16

Cash outflows to purchase long-term investments would be reported in the investing section of the cash flow statement.

Accepted Answer

A) True 
 B)False

Question 17

Net cash provided (used) by operating activities is determined by converting profit from an accrual basis to a cash basis.

Accepted Answer

A) True 
 B)False

Question 18

What are the three sections on a cash flow statement?

Accepted Answer

Operating Activities

Cash paid to purchase equipment would be classified in what section of the cash flow statement?

A cash flow statement starts with profit and adds (or deducts) items on the income statement that did not affect cash to arrive at cash provided by operating activities if the indirect method is used.

If equipment was sold for $15,000 and a loss of $10,000 was recognized, investing activities would show a cash inflow of $15,000.

Given the following information, calculate the cash provided (used) by operating activities. You may use either the direct or the indirect method.

An increase in dividends payable increases net cash provided by operating activities.

Cash inflows and outflows from investing and financing activities should be reported separately on the cash flow statement.

Information for the cash flow statement is taken from the adjusted trial balance.

The issue of bonds to acquire land would be shown in the financing section.

Purchases of non-current assets are considered cash outflows used by operating activities.

Cash inflows from investing activities include:

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

A company has credit sales of $150,000 and cash sales of $90,000 during the same year that the Accounts Receivable account decreased by $20,000. What was the total cash received from customers?

Noncash investing and financing activities:

Cash outflows to purchase long-term investments would be reported in the investing section of the cash flow statement.

Net cash provided (used) by operating activities is determined by converting profit from an accrual basis to a cash basis.

What are the three sections on a 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

Accounting for Receivables

Long-Lived Assets

Current Liabilities

Financial Reporting Concepts

Accounting for Partnerships

Introduction to Corporations

Corporations: Additional Topics and IFRS

Non-Current Liabilities

Financial Statement Analysis

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Exam 16: The Cash Flow Statement

Cash paid to purchase equipment would be classified in what section of the cash flow statement?

A cash flow statement starts with profit and adds (or deducts) items on the income statement that did not affect cash to arrive at cash provided by operating activities if the indirect method is used.

If equipment was sold for $15,000 and a loss of $10,000 was recognized, investing activities would show a cash inflow of $15,000.

Given the following information, calculate the cash provided (used) by operating activities. You may use either the direct or the indirect method.

An increase in dividends payable increases net cash provided by operating activities.

Cash inflows and outflows from investing and financing activities should be reported separately on the cash flow statement.

Information for the cash flow statement is taken from the adjusted trial balance.

The issue of bonds to acquire land would be shown in the financing section.

Purchases of non-current assets are considered cash outflows used by operating activities.

Cash inflows from investing activities include:

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

A company has credit sales of $150,000 and cash sales of $90,000 during the same year that the Accounts Receivable account decreased by $20,000. What was the total cash received from customers?

Noncash investing and financing activities:

Cash outflows to purchase long-term investments would be reported in the investing section of the cash flow statement.

Net cash provided (used) by operating activities is determined by converting profit from an accrual basis to a cash basis.

What are the three sections on a 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

Accounting for Receivables

Long-Lived Assets

Current Liabilities

Financial Reporting Concepts

Accounting for Partnerships

Introduction to Corporations

Corporations: Additional Topics and IFRS

Non-Current Liabilities

Financial Statement Analysis

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