Question 1

Which of the following would appear on a statement of cash flows prepared using the direct method?

Accepted Answer

A) Interest received on a loan would appear on the statement. 
B) Collections from customers would appear on the statement. 
C) Cash payment of dividends would appear on the statement. 
D) All of the above would appear on the statement. 
A) Interest received on a loan would appear on the statement. 
B) Collections from customers would appear on the statement. 
C) Cash payment of dividends would appear on the statement. 
D) All of the above would appear on the statement.

Question 2

A company's inventory account increased $26,500 and its accounts payable account decreased $18,250 during the year. The accounts payable relates only to the acquisition of inventory. Sales were $789,500 and cost of goods sold was $532,700. What was the amount of payments to suppliers of inventory?

Accepted Answer

A) $550,950 
B) $577,450 
C) $540,950 
D) $834,250 
A) $550,950 
B) $577,450 
C) $540,950 
D) $834,250

Question 3

Which of the following parties would have an interest in the cash a company has?

Accepted Answer

A) Creditors expecting loans and interest to be repaid 
B) Employees expecting to be reimbursed for their work 
C) Investors expecting a dividend 
D) All of the above are parties interested in the cash of a company 
A) Creditors expecting loans and interest to be repaid 
B) Employees expecting to be reimbursed for their work 
C) Investors expecting a dividend 
D) All of the above are parties interested in the cash of a company

Question 4

A company's income statement reports depreciation expenses of $30,000. If the company uses the direct method to prepare the statement of cash flows, how will the depreciation expense be reported on the statement?

Accepted Answer

A) Depreciation expense would be an addition under investing activities. 
B) Depreciation expense would be an addition under financing activities. 
C) Depreciation expense would be a deduction under operating activities. 
D) Depreciation would not be reported on the statement of cash flows. 
A) Depreciation expense would be an addition under investing activities. 
B) Depreciation expense would be an addition under financing activities. 
C) Depreciation expense would be a deduction under operating activities. 
D) Depreciation would not be reported on the statement of cash flows.

Question 5

Use the direct method of cash flows to answer the question.
Beginning A/R: $68,000 Beginning Inventory: $42,500
Ending A/R: $79,000 Ending Inventory: $47,000
Credit Sales: $745,000 Beginning A/P: $29,000
Cost of Goods Sold: $412,000 Ending A/P: $36,300
Compute the cash received from receivables customers during the year.

Accepted Answer

$734,000
C

Question 6

Match between columns
                        Premises: Received stock dividends
Acquired a patent by issuing common stock
Paid interest on a short-term note payable
Sold treasury stock for cash
Received cash dividends
Paid salaries
Paid cash dividends
Sold merchandise for cash
Converted debt to common stock
Purchase of land using preferred stock
Paid accounts payable

Accepted Answer

The Answer of N for items not disclosed on the is...

Question 7

A cash flow statement shows $25,000 from financing, ($9,200)from investing and $21,000 from operations. The cash balance must have increased or decreased by

Accepted Answer

A) $46,000. 
B) $55,200. 
C) $36,800. 
D) $15,800. 
A) $46,000. 
B) $55,200. 
C) $36,800. 
D) $15,800.

Question 8

The ________ section from the statement of cash flows includes loans to others and collections on loans.

Accepted Answer

A) investing 
B) financing 
C) operating 
D) None of the above 
A) investing 
B) financing 
C) operating 
D) None of the above

Question 9

The ________ is needed to prepare the statement of cash flows.

Accepted Answer

A) accounts receivable ledger 
B) accounts payable ledger 
C) general journal 
D) balance sheet from the beginning and ending of the period 
A) accounts receivable ledger 
B) accounts payable ledger 
C) general journal 
D) balance sheet from the beginning and ending of the period

Question 10

A company purchases equipment for use in its business activities. If the company prepares the statement of cash flows using the indirect method or the direct method, where would this transaction appear?

Accepted Answer

A) The purchase of equipment would be presented in the non-cash investing and financing activities section under both methods. 
B) The purchase of equipment would be presented in the financing activities section as a cash payment under both methods. 
C) The purchase of equipment would be presented in the investing activities section as a cash payment under both methods. 
D) The purchase of equipment would be presented in the operating activities section as a reduction in net income under the indirect method and as a cash payment under the direct method. 
A) The purchase of equipment would be presented in the non-cash investing and financing activities section under both methods. 
B) The purchase of equipment would be presented in the financing activities section as a cash payment under both methods. 
C) The purchase of equipment would be presented in the investing activities section as a cash payment under both methods. 
D) The purchase of equipment would be presented in the operating activities section as a reduction in net income under the indirect method and as a cash payment under the direct method.

Question 11

The ________ section from the statement of cash flows would include the issuance of a stock dividend.

Accepted Answer

A) operating 
B) financing 
C) investing 
D) None of the above 
A) operating 
B) financing 
C) investing 
D) None of the above

Question 12

A purpose for the statement of cash flows could be which of the following?

Accepted Answer

A) To evaluate board of directors' decisions 
B) To determine the ability to pay dividends to stockholders and interest and principle to creditors 
C) To help predict management's future decisions 
D) To report the earnings per share 
A) To evaluate board of directors' decisions 
B) To determine the ability to pay dividends to stockholders and interest and principle to creditors 
C) To help predict management's future decisions 
D) To report the earnings per share

Question 13

On a cash flow statement prepared using the indirect method, which is not reported as an operating activity?

Accepted Answer

A) Interest expense 
B) Interest revenue 
C) Proceeds from the sale of equipment 
D) Dividend revenue 
A) Interest expense 
B) Interest revenue 
C) Proceeds from the sale of equipment 
D) Dividend revenue

Question 14

The income statement and a partial balance sheet for Regovich Company is presented below. Prepare the operating activities section of the statement of cash flows using the indirect method.
Regovich Company
Income Statement
For the Current Year
   Regovich Company
Partial Balance Sheet
End of this year

Accepted Answer

Regovich Company
Par

Question 15

A company purchases land using its common stock. If the company prepares the statement of cash flows using the indirect method or the direct method, where would this transaction appear?

Accepted Answer

A) The purchase of land would be presented in the financing activities section as a cash payment under both methods. 
B) The purchase of land would be presented in the investing activities section as a cash payment under both methods. 
C) The purchase of land would be presented in the operating activities section as a reduction in net income under the indirect method and as a cash payment under the direct method. 
D) The purchase of land would be presented in the non-cash investing and financing activities section under both methods. 
A) The purchase of land would be presented in the financing activities section as a cash payment under both methods. 
B) The purchase of land would be presented in the investing activities section as a cash payment under both methods. 
C) The purchase of land would be presented in the operating activities section as a reduction in net income under the indirect method and as a cash payment under the direct method. 
D) The purchase of land would be presented in the non-cash investing and financing activities section under both methods.

Question 16

How can a company that has shown net income in recent years be required to declare bankruptcy? How can the statement of cash flows provide an advanced warning about this possibility?

Accepted Answer

Net income results when revenues exceed

Question 17

Which of the following would not appear on a statement of cash flows prepared using the direct method?

Accepted Answer

A) Cash receipts from customers 
B) Cash payments for insurance 
C) Depreciation expense 
D) Cash payments for salaries and wages 
A) Cash receipts from customers 
B) Cash payments for insurance 
C) Depreciation expense 
D) Cash payments for salaries and wages

Question 18

A company uses the direct method to prepare the statement of cash flows. It presents the following amounts on its financial statements.   *Relates solely to the acquisition of inventory
What will appear in the operating activities section related to accounts receivable?

Accepted Answer

A) The increase of $15,000 will be subtracted from net income. 
B) The increase of $15,000 will be subtracted from sales to determine cash received from customers. 
C) The increase of $15,000 will be added to sales to determine cash received from customers. 
D) The increase of $15,000 will be added to net income. 
A) The increase of $15,000 will be subtracted from net income. 
B) The increase of $15,000 will be subtracted from sales to determine cash received from customers. 
C) The increase of $15,000 will be added to sales to determine cash received from customers. 
D) The increase of $15,000 will be added to net income.

Question 19

Which of the following is an acceptable basis for the preparation of the statement of cash flows?

Accepted Answer

A) The sum of cash, inventory, and money market accounts 
B) The sum of cash and accounts receivable 
C) Cash 
D) The sum of cash and cash equivalents 
A) The sum of cash, inventory, and money market accounts 
B) The sum of cash and accounts receivable 
C) Cash 
D) The sum of cash and cash equivalents

Question 20

A company acquires its own stock to hold as treasury stock. If the company prepares the statement of cash flows using the indirect method or the direct method, where would this transaction appear?

Accepted Answer

A) The acquisition of treasury stock would be presented in the operating activities section as a reduction in net income under the indirect method and as a cash payment under the direct method. 
B) The acquisition of treasury stock would be presented in the non-cash investing and financing activities section under both methods. 
C) The acquisition of treasury stock would be presented in the financing activities section as a cash payment under both methods. 
D) The acquisition of treasury stock would be presented in the investing activities section as a cash payment under both methods. 
A) The acquisition of treasury stock would be presented in the operating activities section as a reduction in net income under the indirect method and as a cash payment under the direct method. 
B) The acquisition of treasury stock would be presented in the non-cash investing and financing activities section under both methods. 
C) The acquisition of treasury stock would be presented in the financing activities section as a cash payment under both methods. 
D) The acquisition of treasury stock would be presented in the investing activities section as a cash payment under both methods.

Which of the following would appear on a statement of cash flows prepared using the direct method?

A company's inventory account increased $26,500 and its accounts payable account decreased $18,250 during the year. The accounts payable relates only to the acquisition of inventory. Sales were $789,500 and cost of goods sold was $532,700. What was the amount of payments to suppliers of inventory?

Which of the following parties would have an interest in the cash a company has?

A company's income statement reports depreciation expenses of $30,000. If the company uses the direct method to prepare the statement of cash flows, how will the depreciation expense be reported on the statement?

A cash flow statement shows $25,000 from financing, ($9,200)from investing and $21,000 from operations. The cash balance must have increased or decreased by

The ________ section from the statement of cash flows includes loans to others and collections on loans.

The ________ is needed to prepare the statement of cash flows.

A company purchases equipment for use in its business activities. If the company prepares the statement of cash flows using the indirect method or the direct method, where would this transaction appear?

The ________ section from the statement of cash flows would include the issuance of a stock dividend.

A purpose for the statement of cash flows could be which of the following?

On a cash flow statement prepared using the indirect method, which is not reported as an operating activity?

The income statement and a partial balance sheet for Regovich Company is presented below. Prepare the operating activities section of the statement of cash flows using the indirect method. Regovich Company Income Statement For the Current Year Regovich Company Partial Balance Sheet End of this year

A company purchases land using its common stock. If the company prepares the statement of cash flows using the indirect method or the direct method, where would this transaction appear?

How can a company that has shown net income in recent years be required to declare bankruptcy? How can the statement of cash flows provide an advanced warning about this possibility?

Which of the following would not appear on a statement of cash flows prepared using the direct method?

A company uses the direct method to prepare the statement of cash flows. It presents the following amounts on its financial statements. *Relates solely to the acquisition of inventory What will appear in the operating activities section related to accounts receivable?

Which of the following is an acceptable basis for the preparation of the statement of cash flows?

A company acquires its own stock to hold as treasury stock. If the company prepares the statement of cash flows using the indirect method or the direct method, where would this transaction appear?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Financial Statement Analysis

Sustainability

Filters

Exam 13: Statement of Cash Flows

Which of the following would appear on a statement of cash flows prepared using the direct method?

A company's inventory account increased $26,500 and its accounts payable account decreased $18,250 during the year. The accounts payable relates only to the acquisition of inventory. Sales were $789,500 and cost of goods sold was $532,700. What was the amount of payments to suppliers of inventory?

Which of the following parties would have an interest in the cash a company has?

A company's income statement reports depreciation expenses of $30,000. If the company uses the direct method to prepare the statement of cash flows, how will the depreciation expense be reported on the statement?

A cash flow statement shows $25,000 from financing, ($9,200)from investing and $21,000 from operations. The cash balance must have increased or decreased by

The ________ section from the statement of cash flows includes loans to others and collections on loans.

The ________ is needed to prepare the statement of cash flows.

A company purchases equipment for use in its business activities. If the company prepares the statement of cash flows using the indirect method or the direct method, where would this transaction appear?

The ________ section from the statement of cash flows would include the issuance of a stock dividend.

A purpose for the statement of cash flows could be which of the following?

On a cash flow statement prepared using the indirect method, which is not reported as an operating activity?

The income statement and a partial balance sheet for Regovich Company is presented below. Prepare the operating activities section of the statement of cash flows using the indirect method. Regovich Company Income Statement For the Current Year Regovich Company Partial Balance Sheet End of this year

A company purchases land using its common stock. If the company prepares the statement of cash flows using the indirect method or the direct method, where would this transaction appear?

How can a company that has shown net income in recent years be required to declare bankruptcy? How can the statement of cash flows provide an advanced warning about this possibility?

Which of the following would not appear on a statement of cash flows prepared using the direct method?

A company uses the direct method to prepare the statement of cash flows. It presents the following amounts on its financial statements. *Relates solely to the acquisition of inventory What will appear in the operating activities section related to accounts receivable?

Which of the following is an acceptable basis for the preparation of the statement of cash flows?

A company acquires its own stock to hold as treasury stock. If the company prepares the statement of cash flows using the indirect method or the direct method, where would this transaction appear?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Financial Statement Analysis

Sustainability

Filters