Question 1

All of the following are examples of cash outflows from an investing activity except

Accepted Answer

A) purchase of equity securities. 
B) loans made to another party. 
C) purchase of commercial real estate. 
D) purchase of treasury stock. 
A) purchase of equity securities. 
B) loans made to another party. 
C) purchase of commercial real estate. 
D) purchase of treasury stock.

Question 2

The indirect method of presenting the investing activities section of the statement of cash flow reconciles net income to net cash provided by investing activities.

Accepted Answer

A) True 
 B)False

Question 3

Which is not reported as an operating activity on a cash flow statement prepared using the indirect method?

Accepted Answer

A) Decreases in inventories 
B) Proceeds from the sales of investments 
C) Interest expense 
D) Increases in Accounts Payable 
A) Decreases in inventories 
B) Proceeds from the sales of investments 
C) Interest expense 
D) Increases in Accounts Payable

Question 4

Financing activities include activities that affect long-term liabilities and owner's equity on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 5

When a company uses the direct method to present the statement of cash flows, the payment of cash dividends reduces the amount of net cash provided by operating activities.

Accepted Answer

A) True 
 B)False

Question 6

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 inventory?

Accepted Answer

A) The decrease of $18,000 will be subtracted from net income. 
B) The decrease of $18,000 will be added to net income. 
C) The decrease of $18,000 will be subtracted from cost of goods sold to determine payments to suppliers. 
D) The decrease of $18,000 will be added to cost of goods sold to determine payments to suppliers. 
A) The decrease of $18,000 will be subtracted from net income. 
B) The decrease of $18,000 will be added to net income. 
C) The decrease of $18,000 will be subtracted from cost of goods sold to determine payments to suppliers. 
D) The decrease of $18,000 will be added to cost of goods sold to determine payments to suppliers.

Question 7

Money borrowed for a mortgage would be a(n)________ activity.

Accepted Answer

A) operating 
B) financing 
C) investing 
D) non-cash 
A) operating 
B) financing 
C) investing 
D) non-cash

Question 8

Which of the following activities are included in the investing activities section of the statement of cash flows?

Accepted Answer

A) Activities that obtain the cash needed to launch and sustain the business 
B) Activities that increase or decrease long-term assets 
C) Activities that create revenue or expenses in the entity's major line of business 
D) None of the above 
A) Activities that obtain the cash needed to launch and sustain the business 
B) Activities that increase or decrease long-term assets 
C) Activities that create revenue or expenses in the entity's major line of business 
D) None of the above

Question 9

When a company uses the indirect method to present the statement of cash flows, an increase in a current liability must be subtracted from net income to reconcile to net cash provided by operating activities.

Accepted Answer

A) True 
 B)False

Question 10

All of the following are cash outflows from an operating activity except

Accepted Answer

A) payment of interest on a loan. 
B) payment for purchasing inventory. 
C) payments to the government for taxes. 
D) owner withdrawal from the company. 
A) payment of interest on a loan. 
B) payment for purchasing inventory. 
C) payments to the government for taxes. 
D) owner withdrawal from the company.

Question 11

The statement of cash flows reflects cash flows during a period of time.

Accepted Answer

A) True 
 B)False

Question 12

The balance sheet for Blineberry Corporation follows:   Operating income for the period was $18,000, while cash dividends paid were $17,400. The overall total of the sources of cash for Blineberry Corporation for the year was

Accepted Answer

A) $40,950. 
B) $8,200. 
C) $48,050. 
D) $12,050. 
A) $40,950. 
B) $8,200. 
C) $48,050. 
D) $12,050.

Question 13

Which of the following sections from the statement of cash flows would include the acquisition of a building by issuing common stock?

Accepted Answer

A) Investing section 
B) Financing section 
C) Operating section 
D) None of the above 
A) Investing section 
B) Financing section 
C) Operating section 
D) None of the above

Question 14

If a company uses the indirect method to prepare the statement of cash flows, how will a loss from the sale of equipment be presented on the statement?

Accepted Answer

A) A loss from the sale of equipment will be added to net income in the operating activities section. 
B) A loss from the sale of equipment will be an addition in the financing activities section. 
C) A loss from the sale of equipment will be deducted from net income in the operating activities section. 
D) A loss from the sale of equipment will be an addition in the investing activities section. 
A) A loss from the sale of equipment will be added to net income in the operating activities section. 
B) A loss from the sale of equipment will be an addition in the financing activities section. 
C) A loss from the sale of equipment will be deducted from net income in the operating activities section. 
D) A loss from the sale of equipment will be an addition in the investing activities section.

Question 15

A company uses the indirect method to prepare the statement of cash flows. How will a gain from the sale of equipment be presented on the statement?

Accepted Answer

A) A gain from the sale of equipment will be an addition in the investing activities section. 
B) A gain from the sale of equipment will be added to net income in the operating activities section. 
C) A gain from the sale of equipment will be a deduction in the financing activities section. 
D) A gain from the sale of equipment will be deducted from net income in the operating activities section. 
A) A gain from the sale of equipment will be an addition in the investing activities section. 
B) A gain from the sale of equipment will be added to net income in the operating activities section. 
C) A gain from the sale of equipment will be a deduction in the financing activities section. 
D) A gain from the sale of equipment will be deducted from net income in the operating activities section.

Question 16

If a company uses the indirect method to prepare the statement of cash flows, which of the following items would be subtracted from net income in determining the net cash flow from operating activities?

Accepted Answer

A) A loss on the sale of equipment would be subtracted from net income. 
B) An increase in dividends payable would be subtracted from net income. 
C) Amortization of a premium on bonds payable would be subtracted from net income. 
D) Depreciation expense would be subtracted from net income. 
A) A loss on the sale of equipment would be subtracted from net income. 
B) An increase in dividends payable would be subtracted from net income. 
C) Amortization of a premium on bonds payable would be subtracted from net income. 
D) Depreciation expense would be subtracted from net income.

Question 17

A company uses the indirect method to prepare the statement of cash flows, how will a gain from the sale of equipment be presented on the statement?

Accepted Answer

A) A gain from the sale of equipment will be added to net income in the operating activities section. 
B) A gain from the sale of equipment will be an addition in the financing activities section. 
C) A gain from the sale of equipment will be deducted from net income in the operating activities section. 
D) A gain from the sale of equipment will be an addition in the investing activities section. 
A) A gain from the sale of equipment will be added to net income in the operating activities section. 
B) A gain from the sale of equipment will be an addition in the financing activities section. 
C) A gain from the sale of equipment will be deducted from net income in the operating activities section. 
D) A gain from the sale of equipment will be an addition in the investing activities section.

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 salary payable?

Accepted Answer

A) The increase of $4,000 will be subtracted from salary expense to determine payments to employees. 
B) The increase of $4,000 will be subtracted from net income. 
C) The increase of $4,000 will be added to salary expense to determine payments to employees. 
D) The increase of $4,000 will be added to net income. 
A) The increase of $4,000 will be subtracted from salary expense to determine payments to employees. 
B) The increase of $4,000 will be subtracted from net income. 
C) The increase of $4,000 will be added to salary expense to determine payments to employees. 
D) The increase of $4,000 will be added to net income.

Question 19

With regard to the information included on a statement of cash flows, which of the following statements is true?

Accepted Answer

A) The statement of cash flows contains information about stock splits and stock dividends distributed by the company. 
B) The statement of cash flows contains information about the business's ability to generate positive cash flows in future periods. 
C) The statement of cash flows contains information about the business's percentage change in each item of revenue and expense. 
D) The statement of cash flows contains information about the differences between net income and additions to retained earnings. 
A) The statement of cash flows contains information about stock splits and stock dividends distributed by the company. 
B) The statement of cash flows contains information about the business's ability to generate positive cash flows in future periods. 
C) The statement of cash flows contains information about the business's percentage change in each item of revenue and expense. 
D) The statement of cash flows contains information about the differences between net income and additions to retained earnings.

Question 20

Which of the activities sections of the statement of cash flows would include a loss of $20,000 from the sale of equipment?

Accepted Answer

A) Investing 
B) Operating 
C) Financing 
D) Would not be on the statement of cash flows 
A) Investing 
B) Operating 
C) Financing 
D) Would not be on the statement of cash flows

All of the following are examples of cash outflows from an investing activity except

The indirect method of presenting the investing activities section of the statement of cash flow reconciles net income to net cash provided by investing activities.

Which is not reported as an operating activity on a cash flow statement prepared using the indirect method?

Financing activities include activities that affect long-term liabilities and owner's equity on the balance sheet.

When a company uses the direct method to present the statement of cash flows, the payment of cash dividends reduces the amount of net cash provided by operating activities.

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 inventory?

Money borrowed for a mortgage would be a(n)________ activity.

Which of the following activities are included in the investing activities section of the statement of cash flows?

When a company uses the indirect method to present the statement of cash flows, an increase in a current liability must be subtracted from net income to reconcile to net cash provided by operating activities.

All of the following are cash outflows from an operating activity except

The statement of cash flows reflects cash flows during a period of time.

The balance sheet for Blineberry Corporation follows: Operating income for the period was $18,000, while cash dividends paid were $17,400. The overall total of the sources of cash for Blineberry Corporation for the year was

Which of the following sections from the statement of cash flows would include the acquisition of a building by issuing common stock?

If a company uses the indirect method to prepare the statement of cash flows, how will a loss from the sale of equipment be presented on the statement?

A company uses the indirect method to prepare the statement of cash flows. How will a gain from the sale of equipment be presented on the statement?

If a company uses the indirect method to prepare the statement of cash flows, which of the following items would be subtracted from net income in determining the net cash flow from operating activities?

A company uses the indirect method to prepare the statement of cash flows, how will a gain from the sale of equipment be presented on the statement?

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 salary payable?

With regard to the information included on a statement of cash flows, which of the following statements is true?

Which of the activities sections of the statement of cash flows would include a loss of $20,000 from the sale of equipment?

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

All of the following are examples of cash outflows from an investing activity except

The indirect method of presenting the investing activities section of the statement of cash flow reconciles net income to net cash provided by investing activities.

Which is not reported as an operating activity on a cash flow statement prepared using the indirect method?

Financing activities include activities that affect long-term liabilities and owner's equity on the balance sheet.

When a company uses the direct method to present the statement of cash flows, the payment of cash dividends reduces the amount of net cash provided by operating activities.

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 inventory?

Money borrowed for a mortgage would be a(n)________ activity.

Which of the following activities are included in the investing activities section of the statement of cash flows?

When a company uses the indirect method to present the statement of cash flows, an increase in a current liability must be subtracted from net income to reconcile to net cash provided by operating activities.

All of the following are cash outflows from an operating activity except

The statement of cash flows reflects cash flows during a period of time.

The balance sheet for Blineberry Corporation follows: Operating income for the period was $18,000, while cash dividends paid were $17,400. The overall total of the sources of cash for Blineberry Corporation for the year was

Which of the following sections from the statement of cash flows would include the acquisition of a building by issuing common stock?

If a company uses the indirect method to prepare the statement of cash flows, how will a loss from the sale of equipment be presented on the statement?

A company uses the indirect method to prepare the statement of cash flows. How will a gain from the sale of equipment be presented on the statement?

If a company uses the indirect method to prepare the statement of cash flows, which of the following items would be subtracted from net income in determining the net cash flow from operating activities?

A company uses the indirect method to prepare the statement of cash flows, how will a gain from the sale of equipment be presented on the statement?

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 salary payable?

With regard to the information included on a statement of cash flows, which of the following statements is true?

Which of the activities sections of the statement of cash flows would include a loss of $20,000 from the sale of equipment?

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