Question 1

Operating activities on the statement of cash flows include activities that affect net income, current liabilities and current assets.

Accepted Answer

A) True 
 B)False

Question 2

If a company uses the direct method to prepare the statement of cash flows, how will the amount of cash purchases of inventory be computed?

Accepted Answer

A) The amount of cash purchases of inventory is computed as cost of goods sold plus ending inventory. 
B) The amount of cash purchases of inventory is computed as cost of goods sold plus ending inventory plus beginning inventory. 
C) The amount of cash purchases of inventory is computed as beginning inventory minus ending inventory minus cost of goods sold. 
D) The amount of cash purchases of inventory is computed as cost of goods sold plus ending inventory minus beginning inventory. 
A) The amount of cash purchases of inventory is computed as cost of goods sold plus ending inventory. 
B) The amount of cash purchases of inventory is computed as cost of goods sold plus ending inventory plus beginning inventory. 
C) The amount of cash purchases of inventory is computed as beginning inventory minus ending inventory minus cost of goods sold. 
D) The amount of cash purchases of inventory is computed as cost of goods sold plus ending inventory minus beginning inventory.

Question 3

The primary source of cash over the life of a business is ________.

Accepted Answer

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

Question 4

When a company uses the direct method to present the statement of cash flows, cash received from the sale of treasury stock increases the amount of net cash provided by investing activities.

Accepted Answer

A) True 
 B)False

Question 5

The following data relate to Austin Corporation for last year:   What is the net cash provided by operating activities for last year on the statement of cash flows for Austin Corporation?

Accepted Answer

A) $165,000 
B) $123,000 
C) $169,000 
D) $137,000 
A) $165,000 
B) $123,000 
C) $169,000 
D) $137,000

Question 6

Only the ________ section differs in a statement of cash flows using the direct method rather than the indirect method.

Accepted Answer

A) operating activities 
B) financing activities 
C) investing activities 
D) none of the above 
A) operating activities 
B) financing activities 
C) investing activities 
D) none of the above

Question 7

A company uses the indirect 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 payable?

Accepted Answer

A) The increase of $10,000 will be subtracted from net income. 
B) The increase of $10,000 will be added to net income. 
C) The increase of $10,000 will be subtracted from cost of goods sold. 
D) The increase of $10,000 will be added to cost of goods sold. 
A) The increase of $10,000 will be subtracted from net income. 
B) The increase of $10,000 will be added to net income. 
C) The increase of $10,000 will be subtracted from cost of goods sold. 
D) The increase of $10,000 will be added to cost of goods sold.

Question 8

Cash payments for merchandise inventory under the direct method of preparing the statement of cash flows would be

Accepted Answer

A) shown as Cash payments under Operating Activities. 
B) shown as Cash receipts under Operating Activities. 
C) shown as Cash payments under Investing Activities. 
D) shown as Cash receipts under Investing Activities. 
A) shown as Cash payments under Operating Activities. 
B) shown as Cash receipts under Operating Activities. 
C) shown as Cash payments under Investing Activities. 
D) shown as Cash receipts under Investing Activities.

Question 9

The purchase of inventory would be considered a

Accepted Answer

A) cash outflow from investing activities. 
B) cash outflow from operating activities. 
C) cash outflow from financing activities. 
D) cash outflow from depreciation. 
A) cash outflow from investing activities. 
B) cash outflow from operating activities. 
C) cash outflow from financing activities. 
D) cash outflow from depreciation.

Question 10

Paying cash dividends would be

Accepted Answer

A) a cash outflow from operations. 
B) a cash outflow from financing. 
C) a cash outflow from investing. 
D) none of the above. 
A) a cash outflow from operations. 
B) a cash outflow from financing. 
C) a cash outflow from investing. 
D) none of the above.

Question 11

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 change in accounts receivable for the year.

Accepted Answer

Increase by $11,000

Question 12

Use the indirect method of preparing a statement of cash flows to answer the question.
Ending balances for Sunday Hut are listed below:
   Net income for this year was $97,000 and dividends of $24,000 were declared and paid this year.
What was the net cash used for investing activities?

Accepted Answer

($467,000)
Calculati

Question 13

The ________ reports an entity's cash receipts and cash payments during the period.

Accepted Answer

A) income statement 
B) statement of retained earnings 
C) balance sheet 
D) statement of cash flows 
A) income statement 
B) statement of retained earnings 
C) balance sheet 
D) statement of cash flows

Question 14

Which of the following is/are created by operating activities?

Accepted Answer

A) An increase in long-term debt 
B) An increase in common stock 
C) Revenues and expenses 
D) Both A and B 
A) An increase in long-term debt 
B) An increase in common stock 
C) Revenues and expenses 
D) Both A and B

Question 15

The ________ is the most important section on the statement of cash flows because it reflects the day-to-day operations that determine the future of an organization.

Accepted Answer

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

Question 16

A company uses the indirect method to prepare the statement of cash flows. How will amortization be presented on the statement?

Accepted Answer

A) Amortization expense will be added to net income in the financing activities section. 
B) Amortization expense will be subtracted from net income in the operating section. 
C) Amortization expense will be added to net income in the operating activities section. 
D) Amortization expense will be added to net income in the investing activities section. 
A) Amortization expense will be added to net income in the financing activities section. 
B) Amortization expense will be subtracted from net income in the operating section. 
C) Amortization expense will be added to net income in the operating activities section. 
D) Amortization expense will be added to net income in the investing activities section.

Question 17

The following data relate to Whitmore Enterprises for last year:   What is the net cash provided by operating activities for last year on the statement of cash flows for Whitmore Enterprises?

Accepted Answer

A) $132,000 
B) $133,000 
C) $163,000 
D) $152,000 
A) $132,000 
B) $133,000 
C) $163,000 
D) $152,000

Question 18

The ________ section from the statement of cash flows includes activities that create revenue, expenses, gains and losses.

Accepted Answer

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

Question 19

On the statement of cash flows, which of the following items would be reported as an operating activity?

Accepted Answer

A) A purchase of treasury stock 
B) A payment of dividends 
C) A payment of interest 
D) An issuance of stock 
A) A purchase of treasury stock 
B) A payment of dividends 
C) A payment of interest 
D) An issuance of stock

Question 20

All of the following would be included in the operating activities section of a direct method statement of cash flow except

Accepted Answer

A) changes in accounts payable. 
B) changes in accounts receivable. 
C) changes in depreciation. 
D) changes in inventory. 
A) changes in accounts payable. 
B) changes in accounts receivable. 
C) changes in depreciation. 
D) changes in inventory.

Operating activities on the statement of cash flows include activities that affect net income, current liabilities and current assets.

If a company uses the direct method to prepare the statement of cash flows, how will the amount of cash purchases of inventory be computed?

The primary source of cash over the life of a business is ________.

When a company uses the direct method to present the statement of cash flows, cash received from the sale of treasury stock increases the amount of net cash provided by investing activities.

The following data relate to Austin Corporation for last year: What is the net cash provided by operating activities for last year on the statement of cash flows for Austin Corporation?

Only the ________ section differs in a statement of cash flows using the direct method rather than the indirect method.

A company uses the indirect 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 payable?

Cash payments for merchandise inventory under the direct method of preparing the statement of cash flows would be

The purchase of inventory would be considered a

Paying cash dividends would be

Use the indirect method of preparing a statement of cash flows to answer the question. Ending balances for Sunday Hut are listed below: Net income for this year was $97,000 and dividends of $24,000 were declared and paid this year. What was the net cash used for investing activities?

The ________ reports an entity's cash receipts and cash payments during the period.

Which of the following is/are created by operating activities?

The ________ is the most important section on the statement of cash flows because it reflects the day-to-day operations that determine the future of an organization.

A company uses the indirect method to prepare the statement of cash flows. How will amortization be presented on the statement?

The following data relate to Whitmore Enterprises for last year: What is the net cash provided by operating activities for last year on the statement of cash flows for Whitmore Enterprises?

The ________ section from the statement of cash flows includes activities that create revenue, expenses, gains and losses.

On the statement of cash flows, which of the following items would be reported as an operating activity?

All of the following would be included in the operating activities section of a direct method statement of cash flow except

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

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Exam 13: Statement of Cash Flows

Operating activities on the statement of cash flows include activities that affect net income, current liabilities and current assets.

If a company uses the direct method to prepare the statement of cash flows, how will the amount of cash purchases of inventory be computed?

The primary source of cash over the life of a business is ________.

When a company uses the direct method to present the statement of cash flows, cash received from the sale of treasury stock increases the amount of net cash provided by investing activities.

The following data relate to Austin Corporation for last year: What is the net cash provided by operating activities for last year on the statement of cash flows for Austin Corporation?

Only the ________ section differs in a statement of cash flows using the direct method rather than the indirect method.

A company uses the indirect 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 payable?

Cash payments for merchandise inventory under the direct method of preparing the statement of cash flows would be

The purchase of inventory would be considered a

Paying cash dividends would be

Use the indirect method of preparing a statement of cash flows to answer the question. Ending balances for Sunday Hut are listed below: Net income for this year was $97,000 and dividends of $24,000 were declared and paid this year. What was the net cash used for investing activities?

The ________ reports an entity's cash receipts and cash payments during the period.

Which of the following is/are created by operating activities?

The ________ is the most important section on the statement of cash flows because it reflects the day-to-day operations that determine the future of an organization.

A company uses the indirect method to prepare the statement of cash flows. How will amortization be presented on the statement?

The following data relate to Whitmore Enterprises for last year: What is the net cash provided by operating activities for last year on the statement of cash flows for Whitmore Enterprises?

The ________ section from the statement of cash flows includes activities that create revenue, expenses, gains and losses.

On the statement of cash flows, which of the following items would be reported as an operating activity?

All of the following would be included in the operating activities section of a direct method statement of cash flow except

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