Question 1

In a statement of cash flows,proceeds from issuing equity instruments should be classified as cash inflows from

Accepted Answer

A)  lending activities. 
B)  operating activities. 
C)  investing activities. 
D)  financing activities. 
A)  lending activities. 
B)  operating activities. 
C)  investing activities. 
D)  financing activities.

Question 2

Tinker Company reported sales revenue of $500,000 and total expenses of $450,000 (including depreciation)for the year ended December 31,2010.During 2010,accounts receivable decreased by $5,000,merchandise inventory increased by $4,000,accounts payable increased by $6,000,and depreciation expense of $10,000 was recorded.Assuming no other data is needed and using the indirect method,the net cash inflow from operating activities for 2010 was

Accepted Answer

A)  $60,000 
B)  $67,000 
C)  $44,000 
D)  $51,000 
A)  $60,000 
B)  $67,000 
C)  $44,000 
D)  $51,000

Question 3

Lui Company's 2010 income statement reported total sales revenue of $250,000.The 2009-2010 comparative balance sheets showed that accounts receivable decreased by $20,000.The 2010 "cash receipts from customers" would be

Accepted Answer

A)  $270,000 
B)  $250,000 
C)  $230,000 
D)  $40,000 
A)  $270,000 
B)  $250,000 
C)  $230,000 
D)  $40,000

Question 4

The payment of dividends would be classified as ____________________ activities in the statement of cash flows.

Accepted Answer

The answer of The payment of dividends would be classified...

Question 5

When net income is low relative to operating cash flows,we describe the firm as having recorded

Accepted Answer

A)  income-decreasing accruals. 
B)  income-increasing accruals. 
C)  income neutral accruals. 
D)  abnormal accruals. 
A)  income-decreasing accruals. 
B)  income-increasing accruals. 
C)  income neutral accruals. 
D)  abnormal accruals.

Question 6

Free cash flows to all debt and common equity shareholders represents the excess of cash flows from

Accepted Answer

A)  operating activities over cash flows for financing activities 
B)  investing over cash flows for operating activities 
C)  investing over cash flows for financing activities 
D)  operating activities over cash flows for investing activities 
A)  operating activities over cash flows for financing activities 
B)  investing over cash flows for operating activities 
C)  investing over cash flows for financing activities 
D)  operating activities over cash flows for investing activities

Question 7

Jarrett Company,home improvement retailer,reported cost of goods sold of $33,729 million for the fiscal year ended January 30,2010.It reported merchandise inventories of $9,611 million at the beginning of fiscal 2010 and $10,209 million at the end of fiscal 2010.It reported
accounts payable to suppliers of $5,713 million at the beginning of fiscal 2010 and $6,109
million at the end of fiscal 2010.Compute the amount of cash paid to merchandise suppliers
during fiscal 2010.

Accepted Answer

(amounts in $millions)
Cost of Goods Sol

Question 8

Normally,cash flows from operations will peak during which phase of the product life cycle?

Accepted Answer

A)  Introduction 
B)  Growth 
C)  Maturity 
D)  Decline 
A)  Introduction 
B)  Growth 
C)  Maturity 
D)  Decline

Question 9

____________________ activities relate to the normal operations of the firm,selling goods and providing services.

Accepted Answer

The answer of ____________________ activities relate to the normal operations...

Question 10

Adophus,Inc.'s 2010 income statement reported total revenues of $850,000 and total expenses (including $40,000 depreciation)of $720,000.The 2010 balance sheet reported the following: accounts receivable beginning balance of $50,000 and ending balance of $40,000; accounts payable beginning balance of $22,000 and ending balance of $28,000.Therefore,based only on this information and using the indirect method,the 2010 net cash inflow from operating activities was

Accepted Answer

A)  $126,000 
B)  $186,000 
C)  $166,000 
D)  $174,000 
A)  $126,000 
B)  $186,000 
C)  $166,000 
D)  $174,000

Question 11

Norton Company reported total sales revenue of $55,000,total expenses of $45,000,and net income of $10,000 on its income statement for the year ended December 31,2010.During 2010,accounts receivable decreased by $4,000,merchandise inventory decreased by $6,000,accounts payable increased by $2,000,and depreciation of $8,000 was recorded.Therefore,based only on this information,the net cash flow from operating activities using the indirect method for 2010 was:

Accepted Answer

A)  $30,000 
B)  $10,000 
C)  $18,000 
D)  $19,000 
A)  $30,000 
B)  $10,000 
C)  $18,000 
D)  $19,000

Question 12

Clarion Industries manufactures computer equipment and provides financing for purchases by its customers.Clarion reported sales and interest revenues of $61,324 million for 2010.The
balance sheet showed current and noncurrent receivables of $25,752 million at the beginning
of 2010 and $28,448 million at the end of 2010.Compute the amount of cash collected
from customers during 2010.

Accepted Answer

(in $millions)
Sales and Inter

Question 13

Cash flows from ____________________ activities will normally be negative during all of the introduction and growth phase of the product life cycle.

Accepted Answer

The answer of Cash flows from ____________________ activities will normally...

Question 14

When preparing the statement of cash flows using the indirect method,an increase in accounts payable would appear as

Accepted Answer

A)  a decrease in the operating activities section 
B)  an increase in the operating activities section 
C)  a use of cash in the investing activities section 
D)  a source of cash in the investing activities section 
A)  a decrease in the operating activities section 
B)  an increase in the operating activities section 
C)  a use of cash in the investing activities section 
D)  a source of cash in the investing activities section

Question 15

If a firm is growing and expanding its accounts receivable and inventories faster than its current operating liabilities its cash flow from operation will normally be

Accepted Answer

A)  greater than net income 
B)  less than net income 
C)  greater than the change in working capital from operations 
D)  greater than the change in cash 
A)  greater than net income 
B)  less than net income 
C)  greater than the change in working capital from operations 
D)  greater than the change in cash

Question 16

A firm's cash flows will differ from net income each period for all of the following reasons except:

Accepted Answer

A)  cash receipts from customers do not necessarily occur in the same period in which a firm recognizes revenues. 
B)  cash expenditures to employees, suppliers, and governments do not necessarily occur in the same period in which a firm recognizes expenses. 
C)  the company is sustaining losses each period. 
D)  cash inflows and outflows that pertain to investing and financing activities do not immediately flow through the income statement. 
A)  cash receipts from customers do not necessarily occur in the same period in which a firm recognizes revenues. 
B)  cash expenditures to employees, suppliers, and governments do not necessarily occur in the same period in which a firm recognizes expenses. 
C)  the company is sustaining losses each period. 
D)  cash inflows and outflows that pertain to investing and financing activities do not immediately flow through the income statement.

Question 17

As products move through the maturity phase,companies invest to ___________ productive capacity.

Accepted Answer

A)  increase 
B)  decrease 
C)  maintain 
D)  Not enough information to answer this question. 
A)  increase 
B)  decrease 
C)  maintain 
D)  Not enough information to answer this question.

Question 18

Cilca Corporation is a supplier to the pulp and paper industry.Selected financial information about Cilca is listed below:
· Purchased real estate for $440,000 in cash.The cash was borrowed from a bank.
· Sold investments for $400,000.
· Paid dividends of $480,000.
· Issued shares of common stock for $200,000.
· Purchased machinery and equipment for $100,000 cash.
· Paid $360,000 on a bank loan.
· Reduced accounts receivable by $80,000.
· Increased accounts payable $160,000.
Use the above information to calculate Cilca's:
a.cash used or provided by investing activities
b.cash used or provided by financing activities

Accepted Answer

The answer of Cilca Corporation is a supplier to the...

Question 19

One factor that may cause cash flow from operations to differ from net income is the length of the ______________________________.

Accepted Answer

The answer of One factor that may cause cash flow...

Question 20

Outback Corp.recorded sales of $1,300,000 in 2010,in addition the company's accounts receivable balance grew from $120,000 at the beginning of 2010 to $165,000 at the end of 2010.How much cash did Outback collect from customers in 2010?

Accepted Answer

A)  $1,300,000 
B)  $1,345,000 
C)  $1,255,000 
D)  $1,135,000 
A)  $1,300,000 
B)  $1,345,000 
C)  $1,255,000 
D)  $1,135,000

In a statement of cash flows,proceeds from issuing equity instruments should be classified as cash inflows from

Lui Company's 2010 income statement reported total sales revenue of $250,000.The 2009-2010 comparative balance sheets showed that accounts receivable decreased by $20,000.The 2010 "cash receipts from customers" would be

The payment of dividends would be classified as ____________________ activities in the statement of cash flows.

When net income is low relative to operating cash flows,we describe the firm as having recorded

Free cash flows to all debt and common equity shareholders represents the excess of cash flows from

Normally,cash flows from operations will peak during which phase of the product life cycle?

____________________ activities relate to the normal operations of the firm,selling goods and providing services.

Cash flows from ____________________ activities will normally be negative during all of the introduction and growth phase of the product life cycle.

When preparing the statement of cash flows using the indirect method,an increase in accounts payable would appear as

If a firm is growing and expanding its accounts receivable and inventories faster than its current operating liabilities its cash flow from operation will normally be

A firm's cash flows will differ from net income each period for all of the following reasons except:

As products move through the maturity phase,companies invest to ___________ productive capacity.

One factor that may cause cash flow from operations to differ from net income is the length of the ______________________________.

Outback Corp.recorded sales of $1,300,000 in 2010,in addition the company's accounts receivable balance grew from $120,000 at the beginning of 2010 to $165,000 at the end of 2010.How much cash did Outback collect from customers in 2010?

Overview of Financial Reporting, Financial Statement Analysis, and Valuation

Asset and Liability Valuation and Income Measurement

Profitability Analysis

Risk Analysis

Financing Activities

Investing Activities

Operating Activities

Accounting Quality

Forecasting Financial Statements

Risk-Adjusted Expected Rates of Return and the Dividends Valuation Approach

Valuation: Cash-Flow-Based Approaches

Valuation: Earnings-Based Approaches

Valuation: Market-Based Approaches

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Exam 3: Income Flows Versus Cash Flows: Understanding the Statement of Cash Flows

In a statement of cash flows,proceeds from issuing equity instruments should be classified as cash inflows from

Lui Company's 2010 income statement reported total sales revenue of $250,000.The 2009-2010 comparative balance sheets showed that accounts receivable decreased by $20,000.The 2010 "cash receipts from customers" would be

The payment of dividends would be classified as ____________________ activities in the statement of cash flows.

When net income is low relative to operating cash flows,we describe the firm as having recorded

Free cash flows to all debt and common equity shareholders represents the excess of cash flows from

Normally,cash flows from operations will peak during which phase of the product life cycle?

____________________ activities relate to the normal operations of the firm,selling goods and providing services.

Cash flows from ____________________ activities will normally be negative during all of the introduction and growth phase of the product life cycle.

When preparing the statement of cash flows using the indirect method,an increase in accounts payable would appear as

If a firm is growing and expanding its accounts receivable and inventories faster than its current operating liabilities its cash flow from operation will normally be

A firm's cash flows will differ from net income each period for all of the following reasons except:

As products move through the maturity phase,companies invest to ___________ productive capacity.

One factor that may cause cash flow from operations to differ from net income is the length of the ______________________________.

Outback Corp.recorded sales of $1,300,000 in 2010,in addition the company's accounts receivable balance grew from $120,000 at the beginning of 2010 to $165,000 at the end of 2010.How much cash did Outback collect from customers in 2010?

Overview of Financial Reporting, Financial Statement Analysis, and Valuation

Asset and Liability Valuation and Income Measurement

Profitability Analysis

Risk Analysis

Financing Activities

Investing Activities

Operating Activities

Accounting Quality

Forecasting Financial Statements

Risk-Adjusted Expected Rates of Return and the Dividends Valuation Approach

Valuation: Cash-Flow-Based Approaches

Valuation: Earnings-Based Approaches

Valuation: Market-Based Approaches

Filters