Exam 11: The Statement of Cash Flows

Operating activities reflect such things as acquiring equipment and machinery.

Under the direct method, depreciation on a building would be reported as a(n):

The Betta Group had net income of $32,000. Accounts Receivable increased by $3,000; accounts payable decreased by $4,000. Depreciation expense for the year was $1,400. Additional transactions include: the purchase of land in exchange for stock $55,000; the sale of treasury stock $3,500; issued bonds $3,000; acquired a building by issuing a note $79,000. Using the indirect method, the net increase (decrease)in cash for the year is:

An example of a cash outflow from financing activities is:

Even though depreciation, depletion and amortization are expenses, they are considered non-cash transactions and must be subtracted from net income in the operating activities section of an indirect method cash flow statement.

Generally, the higher the cash conversion cycle, the healthier the company is financially.

Cash received from the sale of land would be included in financing activities.

Green Timber reported net income of $53,000; depreciation expenses of $11,000; a gain on a land sale of $3,000; and a decrease in Accounts Receivable of $3,500. Under the indirect method, net Cash Flows from operations is:

The records of Eclectic Lighting showed a net loss of $30,000; depreciation expense of $24,000; and an increase in supplies on hand of $4,000. The amount of net cash flow from operating activities using the indirect method is:

The Statement of Cash Flows reports the sources and uses of cash from all of the following EXCEPT:

Gains and losses on the sale of plant, property and equipment are ignored in the direct method of preparing a Statement of Cash Flows.

Dividends received by a company appear in the operating activities section of a direct method cash flow statement.

The ________ is the financial statement associated with the operating, investing and financing activities of a corporation.

The Sales Tax Payable balance has decreased during the year. How would this affect the Statement of Cash Flows operations section under the indirect method?

TLR Productions' Accounts Receivable increased by $44,000 and its Accounts Payable increased by $29,000. What is the net effect on cash from operations under the indirect method?

S&C's records show Accounts Receivable amounted to $205,000 at the beginning of the year and $240,000 at the end of the year. Income reported on the Income Statement for the year was $310,000. The cash flow from operating activities on the cash flow statement using the indirect method is:

Gains and losses do not represent Cash Flows.

A comparative Balance Sheet reports at least two consecutive years of information that can be used to compile a Statement of Cash Flows.

Activities that increase and decrease as a result of selling a company's stock are:

A company settles a long-term note payable plus interest by paying $68,000 cash toward the principal amount and $5,440 cash for the interest. Under the direct method of reporting interest, the $5,440 would be listed as a(n):