Question 1

The exchange of debt for equipment would

Accepted Answer

A)  Be shown on a statement of cash flows as an operating activity 
B)  Be shown on a statement of cash flows as an investing activity 
C)  Be shown on a statement of cash flows as a financing activity 
D)  Be shown as a supplementary disclosure 
A)  Be shown on a statement of cash flows as an operating activity 
B)  Be shown on a statement of cash flows as an investing activity 
C)  Be shown on a statement of cash flows as a financing activity 
D)  Be shown as a supplementary disclosure

Question 2

Which of the following statements is NOT true?

Accepted Answer

A)  The statement of cash flows provides details as to how the cash account changed during a period. 
B)  The statement of cash flows does not replace the income statement. 
C)  The statement of cash flows includes transactions that are not already reflected in the balance sheet and income statement. 
D)  The statement of cash flows sheds some light on a company's ability to generate income in the future. 
A)  The statement of cash flows provides details as to how the cash account changed during a period. 
B)  The statement of cash flows does not replace the income statement. 
C)  The statement of cash flows includes transactions that are not already reflected in the balance sheet and income statement. 
D)  The statement of cash flows sheds some light on a company's ability to generate income in the future.

Question 3

The following data were taken from the 2012 financial statements of Magelby Corporation:   How much cash did Sigma pay for inventory in 2012?

Accepted Answer

A)  $301,500 
B)  $292,500 
C)  $337,500 
D)  $328,500 
A)  $301,500 
B)  $292,500 
C)  $337,500 
D)  $328,500

Question 4

Avondale Inc. had the following cash transactions during 2012:
 
- Refer to Exhibit 13-2. What was Avondale's net cash provided by (used in) operating activities?

Accepted Answer

A)  $2,016,000 
B)  $360,000 
C)  $516,000 
D)  $376,000 
A)  $2,016,000 
B)  $360,000 
C)  $516,000 
D)  $376,000

Question 5

Chaffee Company's financial statements show a net loss of $180,000. The following items also appear on Chaffee's balance sheet:   What is Chaffee's net cash flow from operating activities?

Accepted Answer

A)  $84,000 
B)  ($156,000) 
C)  $348,000 
D)  ($180,000) 
A)  $84,000 
B)  ($156,000) 
C)  $348,000 
D)  ($180,000)

Question 6

Selected balance sheet and income statement data for Fowler Inc. are presented below. The company uses the direct method in preparing its statement of cash flows.
 
- Refer to Exhibit 13-4. Given the information above, cash paid for insurance is

Accepted Answer

A)  $9,500 
B)  $10,000 
C)  $10,500 
D)  Not determinable from the information given 
A)  $9,500 
B)  $10,000 
C)  $10,500 
D)  Not determinable from the information given

Question 7

Analysis using cash flow information is restricted to

Accepted Answer

A)  Vertical analysis 
B)  Horizontal analysis 
C)  Relationships among the categories in the statement of cash flows 
D)  All of these are correct 
A)  Vertical analysis 
B)  Horizontal analysis 
C)  Relationships among the categories in the statement of cash flows 
D)  All of these are correct

Question 8

If a company is to succeed over the long-term, positive cash flows are necessary from

Accepted Answer

A)  Operating activities 
B)  Investing activities 
C)  Financing activities 
D)  Both investing and financing activities 
A)  Operating activities 
B)  Investing activities 
C)  Financing activities 
D)  Both investing and financing activities

Question 9

Which of the following would be reported as an operating activity on a statement of cash flows?

Accepted Answer

A)  Payment of taxes 
B)  Payment of dividends 
C)  Repayment of a loan 
D)  Purchase of a building 
A)  Payment of taxes 
B)  Payment of dividends 
C)  Repayment of a loan 
D)  Purchase of a building

Question 10

A simple statement of cash flows can be prepared by using

Accepted Answer

A)  The cash t-account 
B)  The beginning trial balance 
C)  The ending trial balance 
D)  The income statement 
A)  The cash t-account 
B)  The beginning trial balance 
C)  The ending trial balance 
D)  The income statement

Question 11

Which of the following would be classified as an investing activity on a statement of cash flows?

Accepted Answer

A)  Cash received from dividends 
B)  Cash paid for interest 
C)  Cash received from the sale of a land 
D)  Cash used to repay principal amounts borrowed 
A)  Cash received from dividends 
B)  Cash paid for interest 
C)  Cash received from the sale of a land 
D)  Cash used to repay principal amounts borrowed

Question 12

Which of the following would NOT be considered cash or cash equivalents for purposes of preparing a statement of cash flows?

Accepted Answer

A)  Money market funds 
B)  Checking accounts 
C)  Treasury bills 
D)  Notes receivable 
A)  Money market funds 
B)  Checking accounts 
C)  Treasury bills 
D)  Notes receivable

Question 13

Ozark Corporation's Retained Earnings balance increased by $100,000 during the year. Ozark also paid $30,000 in cash dividends that had been declared last year and declared dividends of $40,000 for the current year (but has not paid them at year-end). Ozark's net income for the current year must be

Accepted Answer

A)  $60,000 
B)  $140,000 
C)  $130,000 
D)  $100,000 
A)  $60,000 
B)  $140,000 
C)  $130,000 
D)  $100,000

Question 14

If depreciation expense is $20,000 and the beginning and ending Accumulated Depreciation balances are $100,000 and $110,000, respectively, cash paid for depreciation is

Accepted Answer

A)  $0 
B)  $10,000 
C)  $20,000 
D)  $100,000 
A)  $0 
B)  $10,000 
C)  $20,000 
D)  $100,000

Question 15

The indirect method of preparing a statement of cash flows

Accepted Answer

A)  Results in the same net cash flow from operating activities as the direct method 
B)  Is the method most often used in practice 
C)  Involves adjusting the net income figure for any noncash expenses 
D)  Does all of these items 
A)  Results in the same net cash flow from operating activities as the direct method 
B)  Is the method most often used in practice 
C)  Involves adjusting the net income figure for any noncash expenses 
D)  Does all of these items

Question 16

Durning Company loaned $1,000,000 at 8 percent interest to Silva Company. The interest revenue would be classified as a(n)

Accepted Answer

A)  Operating activity 
B)  Investing activity 
C)  Financing activity 
D)  Noncash transaction 
A)  Operating activity 
B)  Investing activity 
C)  Financing activity 
D)  Noncash transaction

Question 17

If cost of goods sold is $80,000 and the beginning and ending Accounts Payable balances are $10,000 and $15,000, respectively, cash paid to suppliers is

Accepted Answer

A)  $75,000 
B)  $80,000 
C)  $85,000 
D)  Not determinable from the information given 
A)  $75,000 
B)  $80,000 
C)  $85,000 
D)  Not determinable from the information given

Exam 13: Statement of Cash Flows

The exchange of debt for equipment would

Which of the following statements is NOT true?

The following data were taken from the 2012 financial statements of Magelby Corporation: How much cash did Sigma pay for inventory in 2012?

Avondale Inc. had the following cash transactions during 2012: - Refer to Exhibit 13-2. What was Avondale's net cash provided by (used in) operating activities?

Chaffee Company's financial statements show a net loss of $180,000. The following items also appear on Chaffee's balance sheet: What is Chaffee's net cash flow from operating activities?

Selected balance sheet and income statement data for Fowler Inc. are presented below. The company uses the direct method in preparing its statement of cash flows. - Refer to Exhibit 13-4. Given the information above, cash paid for insurance is

Analysis using cash flow information is restricted to

If a company is to succeed over the long-term, positive cash flows are necessary from

Which of the following would be reported as an operating activity on a statement of cash flows?

A simple statement of cash flows can be prepared by using

Which of the following would be classified as an investing activity on a statement of cash flows?

Which of the following would NOT be considered cash or cash equivalents for purposes of preparing a statement of cash flows?

Ozark Corporation's Retained Earnings balance increased by $100,000 during the year. Ozark also paid $30,000 in cash dividends that had been declared last year and declared dividends of $40,000 for the current year (but has not paid them at year-end). Ozark's net income for the current year must be

If depreciation expense is $20,000 and the beginning and ending Accumulated Depreciation balances are $100,000 and $110,000, respectively, cash paid for depreciation is

The indirect method of preparing a statement of cash flows

Durning Company loaned $1,000,000 at 8 percent interest to Silva Company. The interest revenue would be classified as a(n)

If cost of goods sold is $80,000 and the beginning and ending Accounts Payable balances are $10,000 and $15,000, respectively, cash paid to suppliers is

Accounting Information: Users and Uses

Financial Statements: An Overview

The Accounting Cycle: The Mechanics of Accounting

Completing the Accounting Cycle

Internal Controls: Ensuring the Integrity of Financial Information

Receivables: Selling a Product or a Service

Inventory and the Cost of Sales

Completing the Operating Cycle

Investments: Property, Plant, and Equipment and Intangible Assets

Financing: Long-Term Liabilities

Financing: Equity

Investments: Debt and Equity Securities

Analyzing Financial Statements

Management Accounting and Cost Concepts

Cost Flows and Business Organizations

Activity-Based Costing

Budgeting and Control

Controlling Cost and Profit

Inventory Management and Variable and Absorption Costing

Cost Behavior and Decisions Using C-V-P Analysis

Relevant Information and Decisions

Capital Investment Decisions

New Measures of Performance

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