Question 1

Under the indirect method,depreciation expense is added to net income to arrive at cash flow from operating activities.Depreciation is handled this way because

Accepted Answer

A) it is an inflow of cash 
B) it should be subtracted in arriving at net income 
C) it is deducted in arriving at net income but does not reduce cash 
D) it should be subtracted in arriving at cash from investing activities 
A) it is an inflow of cash 
B) it should be subtracted in arriving at net income 
C) it is deducted in arriving at net income but does not reduce cash 
D) it should be subtracted in arriving at cash from investing activities

Question 2

Which of the following is true about a cash flow statement using the indirect method of determining cash from operations?

Accepted Answer

A) Losses are added back to net income 
B) Gains are subtracted from cash from investing events 
C) Gains are added back to net income 
D) Losses are subtracted from cash from financing events. 
A) Losses are added back to net income 
B) Gains are subtracted from cash from investing events 
C) Gains are added back to net income 
D) Losses are subtracted from cash from financing events.

Question 3

A machine with a cost of $196,500,and a carrying value of $84,900,was sold at a loss of $13,700.This transaction would be reported on a statement of cash flows using the indirect format as a(n):

Accepted Answer

A) $111,600 inflow from investing activities and a $13,700 outflow from operating activities 
B) $97,900 inflow from investing activities and a $13,700 addition to net income 
C) $84,900 inflow from investing activities and a $13,700 addition to net income 
D) $71,200 inflow from investing activities and a $13,700 addition to net income. 
A) $111,600 inflow from investing activities and a $13,700 outflow from operating activities 
B) $97,900 inflow from investing activities and a $13,700 addition to net income 
C) $84,900 inflow from investing activities and a $13,700 addition to net income 
D) $71,200 inflow from investing activities and a $13,700 addition to net income.

Question 4

How should the changes in current accounts be treated in computing cash flows from operating activities using the indirect method?

Accepted Answer

A) Increases in all current accounts must be added to net income 
B) Increases in all current accounts must be subtracted from net income 
C) Increases in all current assets must be added to net income and increases in current liabilities subtracted 
D) Increases in all current assets must be subtracted from net income and increases in current liabilities added 
A) Increases in all current accounts must be added to net income 
B) Increases in all current accounts must be subtracted from net income 
C) Increases in all current assets must be added to net income and increases in current liabilities subtracted 
D) Increases in all current assets must be subtracted from net income and increases in current liabilities added

Question 5

Using the indirect method (statement of cash flows),a decrease in interest receivable would:

Accepted Answer

A) be subtracted from net income 
B) be added to net income 
C) have no adjustment made to net income 
D) be added to the investing section of the statement of cash flows 
A) be subtracted from net income 
B) be added to net income 
C) have no adjustment made to net income 
D) be added to the investing section of the statement of cash flows

Question 6

Using the direct method (statement of cash flows),depreciation expense would:

Accepted Answer

A) be subtracted from net income 
B) be added to net income 
C) have no adjustment made to net income 
D) be added to the investing section of the statement of cash flows 
A) be subtracted from net income 
B) be added to net income 
C) have no adjustment made to net income 
D) be added to the investing section of the statement of cash flows

Question 7

Cash paid for interest on a note payable would be found in the ______ section of the cash flow statement.

Accepted Answer

A) investing 
B) financing 
C) operating 
D) Both A and B 
A) investing 
B) financing 
C) operating 
D) Both A and B

Question 8

Payments to employees would be reported in the following section of the statement of cash flows:

Accepted Answer

A) investing activities 
B) operating activities 
C) financing activities 
D) noncash investing and financing activities 
A) investing activities 
B) operating activities 
C) financing activities 
D) noncash investing and financing activities

Question 9

The sale of short-term marketable securities would be reported in the following section of the statement of cash flows:

Accepted Answer

A) investing activities 
B) operating activities 
C) financing activities 
D) noncash investing and financing activities 
A) investing activities 
B) operating activities 
C) financing activities 
D) noncash investing and financing activities

Question 10

RLV Inc.issued $ 10,000 worth of stock.What section of statement of cash flows will include the cash inflow?

Accepted Answer

A) operating 
B) investing 
C) financing 
D) not included in the statement of cash flows 
A) operating 
B) investing 
C) financing 
D) not included in the statement of cash flows

Question 11

The following information was taken from the comparative balance sheet and income
statement of the Graves Company.From this information determine how much cash was
raise by the sale of equipment and how much equipment was purchased in 2010

Accepted Answer

@#IMG-DLM&
Accumulated Depreciation Beg Bal $40,00

Question 12

On a statement of cash flows using the indirect format,cash paid for interest is:

Accepted Answer

A) deducted from net income in the operating activities section 
B) included as an outflow in the investing activities section 
C) added to net income in the operating activities section 
D) reported as an additional disclosure at the end of the statement. 
A) deducted from net income in the operating activities section 
B) included as an outflow in the investing activities section 
C) added to net income in the operating activities section 
D) reported as an additional disclosure at the end of the statement.

Question 13

To assess a company's ability to meet its obligations and pay dividends,the _________ activities section would be analyzed.

Accepted Answer

A) investing 
B) financing 
C) operating 
D) both a and b are correct 
A) investing 
B) financing 
C) operating 
D) both a and b are correct

Question 14

Cash flows resulting from a company's normal earnings process are reported on the statement of cash flows in the:

Accepted Answer

A) financing activities section 
B) investing activities section 
C) operating activities section 
D) noncash investing and financing activities section 
A) financing activities section 
B) investing activities section 
C) operating activities section 
D) noncash investing and financing activities section

Question 15

Which of the following would not be an investing activity?

Accepted Answer

A) collection of interest on held-to-maturity securities 
B) purchase of available for-sale-securities 
C) making and collecting loans 
D) disposal of plant assets 
A) collection of interest on held-to-maturity securities 
B) purchase of available for-sale-securities 
C) making and collecting loans 
D) disposal of plant assets

Question 16

Using the indirect method (statement of cash flows),a decrease in inventory would:

Accepted Answer

A) be subtracted from net income 
B) be added to net income 
C) have no adjustment made to net income 
D) be added to the investing section of the statement of cash flows 
A) be subtracted from net income 
B) be added to net income 
C) have no adjustment made to net income 
D) be added to the investing section of the statement of cash flows

Question 17

All of the following represent sections of the statement of cash flows except:

Accepted Answer

A) investing activities 
B) financing activities 
C) operating activities 
D) controlling activities 
A) investing activities 
B) financing activities 
C) operating activities 
D) controlling activities

Question 18

On a statement of cash flows using the indirect format,amortization of the discount on notes receivable is:

Accepted Answer

A) deducted from net income in the operating activities section 
B) included as an inflow in the financing activities section 
C) added to net income in the operating activities section 
D) ignored,since it is a noncash expenditure 
A) deducted from net income in the operating activities section 
B) included as an inflow in the financing activities section 
C) added to net income in the operating activities section 
D) ignored,since it is a noncash expenditure

Question 19

The retained earnings account began the year with a balance of $700,000 which was increased with net income of $250,000.If the ending balance of retained earnings was $800,000 and all dividends declared were paid how much cash was paid for dividends during the year.

Accepted Answer

A) $150,000 
B) $250,000 
C) $100,000 
D) $350,000 
A) $150,000 
B) $250,000 
C) $100,000 
D) $350,000

Question 20

Cash collections from customers during 2010 were $468,500,while net accounts receivable decreased $14,250.Sales reported on the income statement were:

Accepted Answer

A) $440,000 
B) $454,250 
C) $482,750 
D) $497,000 
A) $440,000 
B) $454,250 
C) $482,750 
D) $497,000

Under the indirect method,depreciation expense is added to net income to arrive at cash flow from operating activities.Depreciation is handled this way because

Which of the following is true about a cash flow statement using the indirect method of determining cash from operations?

A machine with a cost of $196,500,and a carrying value of $84,900,was sold at a loss of $13,700.This transaction would be reported on a statement of cash flows using the indirect format as a(n):

How should the changes in current accounts be treated in computing cash flows from operating activities using the indirect method?

Using the indirect method (statement of cash flows),a decrease in interest receivable would:

Using the direct method (statement of cash flows),depreciation expense would:

Cash paid for interest on a note payable would be found in the ______ section of the cash flow statement.

Payments to employees would be reported in the following section of the statement of cash flows:

The sale of short-term marketable securities would be reported in the following section of the statement of cash flows:

RLV Inc.issued $ 10,000 worth of stock.What section of statement of cash flows will include the cash inflow?

The following information was taken from the comparative balance sheet and income statement of the Graves Company.From this information determine how much cash was raise by the sale of equipment and how much equipment was purchased in 2010

On a statement of cash flows using the indirect format,cash paid for interest is:

To assess a company's ability to meet its obligations and pay dividends,the _________ activities section would be analyzed.

Cash flows resulting from a company's normal earnings process are reported on the statement of cash flows in the:

Which of the following would not be an investing activity?

Using the indirect method (statement of cash flows),a decrease in inventory would:

All of the following represent sections of the statement of cash flows except:

On a statement of cash flows using the indirect format,amortization of the discount on notes receivable is:

The retained earnings account began the year with a balance of $700,000 which was increased with net income of $250,000.If the ending balance of retained earnings was $800,000 and all dividends declared were paid how much cash was paid for dividends during the year.

Cash collections from customers during 2010 were $468,500,while net accounts receivable decreased $14,250.Sales reported on the income statement were:

Accounting and Business

Business Processes and Accounting Information

Operating Processes: Planning and Control

Short-Term Decision Making

Strategic Planning Regarding Operating Processes

Planning, The Balanced Scorecard, and Budgeting

Accounting Information Systems

Purchasinghuman Resourcespayment Process: Recording and Evaluating Expenditure Process Activities

Recording and Evaluating Conversion Process Activities

Recording and Evaluating Revenue Process Activities

Time Value of Money

Planning Investments: Capital Budgeting

Planning Equity Financing

Planning Debt Financing

Recording and Evaluating Capital Resource Process Activities: Financing

Recording and Evaluating Capital Resource Process Activities: Investing

Company Performance: Profitability

Company Performance: Owners Equity and Financial Position

Company Performance: Comprehensive Evaluation

Filters

Exam 19: Company Performance: Cash Flows

Under the indirect method,depreciation expense is added to net income to arrive at cash flow from operating activities.Depreciation is handled this way because

Which of the following is true about a cash flow statement using the indirect method of determining cash from operations?

A machine with a cost of $196,500,and a carrying value of $84,900,was sold at a loss of $13,700.This transaction would be reported on a statement of cash flows using the indirect format as a(n):

How should the changes in current accounts be treated in computing cash flows from operating activities using the indirect method?

Using the indirect method (statement of cash flows),a decrease in interest receivable would:

Using the direct method (statement of cash flows),depreciation expense would:

Cash paid for interest on a note payable would be found in the ______ section of the cash flow statement.

Payments to employees would be reported in the following section of the statement of cash flows:

The sale of short-term marketable securities would be reported in the following section of the statement of cash flows:

RLV Inc.issued $ 10,000 worth of stock.What section of statement of cash flows will include the cash inflow?

The following information was taken from the comparative balance sheet and income statement of the Graves Company.From this information determine how much cash was raise by the sale of equipment and how much equipment was purchased in 2010

On a statement of cash flows using the indirect format,cash paid for interest is:

To assess a company's ability to meet its obligations and pay dividends,the _________ activities section would be analyzed.

Cash flows resulting from a company's normal earnings process are reported on the statement of cash flows in the:

Which of the following would not be an investing activity?

Using the indirect method (statement of cash flows),a decrease in inventory would:

All of the following represent sections of the statement of cash flows except:

On a statement of cash flows using the indirect format,amortization of the discount on notes receivable is:

The retained earnings account began the year with a balance of $700,000 which was increased with net income of $250,000.If the ending balance of retained earnings was $800,000 and all dividends declared were paid how much cash was paid for dividends during the year.

Cash collections from customers during 2010 were $468,500,while net accounts receivable decreased $14,250.Sales reported on the income statement were:

Accounting and Business

Business Processes and Accounting Information

Operating Processes: Planning and Control

Short-Term Decision Making

Strategic Planning Regarding Operating Processes

Planning, The Balanced Scorecard, and Budgeting

Accounting Information Systems

Purchasinghuman Resourcespayment Process: Recording and Evaluating Expenditure Process Activities

Recording and Evaluating Conversion Process Activities

Recording and Evaluating Revenue Process Activities

Time Value of Money

Planning Investments: Capital Budgeting

Planning Equity Financing

Planning Debt Financing

Recording and Evaluating Capital Resource Process Activities: Financing

Recording and Evaluating Capital Resource Process Activities: Investing

Company Performance: Profitability

Company Performance: Owners Equity and Financial Position

Company Performance: Comprehensive Evaluation

Filters