Question 1

The reporting of financing activities in the statement of cash flows is identical under either the direct or indirect methods.

Accepted Answer

A) True 
 B)False

Question 2

The cash flow on total assets ratio is calculated by:

Accepted Answer

A) Dividing cash flows from operations by average total assets. 
B) Dividing total cash flows by average total assets. 
C) Dividing average total assets by cash flows from investing activities. 
D) Dividing average total assets by total cash flows. 
E) Total cash flows divided by average total assets times 365. 
A) Dividing cash flows from operations by average total assets. 
B) Dividing total cash flows by average total assets. 
C) Dividing average total assets by cash flows from investing activities. 
D) Dividing average total assets by total cash flows. 
E) Total cash flows divided by average total assets times 365.

Question 3

The primary purpose of the statement of cash flows is to report all major cash receipts (inflows)and cash payments (outflows)during a period.

Accepted Answer

A) True 
 B)False

Question 4

Most managers stress the importance of understanding and predicting cash flows for business decisions.

Accepted Answer

A) True 
 B)False

Question 5

The appropriate section in the statement of cash flows for reporting the issuance of common stock for cash is:

Accepted Answer

A) Operating activities. 
B) Financing activities. 
C) Investing activities. 
D) Schedule of noncash investing or financing activity. 
E) None of these.This is not reported on the statement of cash flows. 
A) Operating activities. 
B) Financing activities. 
C) Investing activities. 
D) Schedule of noncash investing or financing activity. 
E) None of these.This is not reported on the statement of cash flows.

Question 6

In preparing a company's statement of cash flows for the most recent year on the indirect method,the following information is available:
  Net cash provided by operating activities was:

Accepted Answer

A) $120,000. 
B) $44,000. 
C) $70,000. 
D) $84,000. 
E) $30,000. 
A) $120,000. 
B) $44,000. 
C) $70,000. 
D) $84,000. 
E) $30,000.

Question 7

What are the five usual steps involved in the preparation of the statement of cash flows?

Accepted Answer

The preparation of the statement of cash

Question 8

The purchase of long-term assets by issuing a note payable for the entire amount is reported on the statement of cash flows in the:

Accepted Answer

A) Operating activities. 
B) Financing activities. 
C) Investing activities. 
D) Schedule of noncash financing and investing activities. 
E) Reconciliation of cash balance. 
A) Operating activities. 
B) Financing activities. 
C) Investing activities. 
D) Schedule of noncash financing and investing activities. 
E) Reconciliation of cash balance.

Question 9

A company's transactions with its creditors to borrow money and/or to repay the principal amounts of both short- and long-term debt are reported as cash flows from:

Accepted Answer

A) Operating activities. 
B) Investing activities. 
C) Financing activities. 
D) Direct activities. 
E) Indirect activities. 
A) Operating activities. 
B) Investing activities. 
C) Financing activities. 
D) Direct activities. 
E) Indirect activities.

Question 10

The statement of cash flows explains the difference between the beginning and ending balances of cash and cash equivalents.

Accepted Answer

A) True 
 B)False

Question 11

When using a spreadsheet to prepare the statement of cash flows,a decrease in accounts payable is entered in the Analysis of Changes columns with a debit in the statement of cash flows section and a credit in the balance sheet section.

Accepted Answer

A) True 
 B)False

Question 12

Cash flows from selling trading securities are usually reported in the statement of cash flows as part of:

Accepted Answer

A) Operating activities. 
B) Financing activities. 
C) Investing activities. 
D) Noncash activities. 
E) None of these.This is not reported in the statement of cash flows. 
A) Operating activities. 
B) Financing activities. 
C) Investing activities. 
D) Noncash activities. 
E) None of these.This is not reported in the statement of cash flows.

Question 13

Use the following company information to calculate its net cash provided or used by investing activities:
(a)Equipment with a book value of $125,000 and an original cost of $220,000 was sold at a gain of $22,000.
(b)Paid $49,000 cash for a new truck.
(c)Sold land costing $30,000 for $26,000 cash,realizing a $4,000 loss.
(d)Purchased treasury stock for $53,000 cash.
(e)Long-term investments in stock are sold for $41,000 cash,realizing a gain of $3,500.

Accepted Answer

The answer of Use the following company information to calculate...

Question 14

A company had average total assets of $2,316,000,total cash flows of $1,320,000,cash flows from operations of $455,000,and cash flows for plant assets of $850,000.The cash flow on total assets ratio equals:

Accepted Answer

A) 17.33%. 
B) 20.97%. 
C) 53.53%. 
D) 34.47%. 
E) 19.65%. 
A) 17.33%. 
B) 20.97%. 
C) 53.53%. 
D) 34.47%. 
E) 19.65%.

Question 15

The cash flow on total assets ratio reflects actual cash flows and is therefore affected by the accounting constraints of recognition and measurement for net income.

Accepted Answer

A) True 
 B)False

Question 16

The following information is available for the Ehrens Corporation:
     Additional information:
(1)There was no gain or loss on the sales of the long-term investments,nor on the bonds retired.
(2)Old equipment with an original cost of $37,550 was sold for $2,100 cash.
(3)New equipment was purchased for $67,550 cash.
(4)Cash dividends of $33,600 were paid.
(5)Additional shares of stock were issued for cash.
Prepare a complete statement of cash flows for calendar-year 2013 using the indirect method.

Accepted Answer

@#IMG-DLM& (a) Received from sales of lo

Question 17

For each of the following items,indicate whether it would be classified as either an (O)operating activity,an (I)investing activity,a (F)financial activity,or a significant (N)noncash financing and investing activity.
__________ (1)Cash sales of merchandise.
__________ (2)Sale of land for cash.
__________ (3)Signed a note payable in exchange for cash.
__________ (4)Purchased supplies for cash.
__________ (5)Paid cash to settle an account payable.
__________ (6)Purchased a warehouse in exchange for shares of its stock.
__________ (7)Paid interest on a note payable.
__________ (8)Reissued treasury stock.
__________ (9)Purchased equipment for cash.
_________ (10)Purchased equipment in exchange for a 6-month note payable.

Accepted Answer

1.O; 2.I;

Question 18

Weston is preparing the company's statement of cash flows for the fiscal year just ended.Using the following information,determine the amount of cash flows from operating activities using the indirect method:

Accepted Answer

A) $332,200. 
B) $236,800. 
C) $261,400. 
D) $186,800. 
E) $189,400. 
A) $332,200. 
B) $236,800. 
C) $261,400. 
D) $186,800. 
E) $189,400.

Question 19

The payment of cash dividends to shareholders is classified as a financing activity.

Accepted Answer

A) True 
 B)False

Question 20

Define the cash flow on total assets ratio and explain how it is used to evaluate cash flows and to assess company performance.

Accepted Answer

The cash flow on total assets ratio is d

Exam 16: Reporting the Statement of Cash Flows

The reporting of financing activities in the statement of cash flows is identical under either the direct or indirect methods.

The cash flow on total assets ratio is calculated by:

The primary purpose of the statement of cash flows is to report all major cash receipts (inflows)and cash payments (outflows)during a period.

Most managers stress the importance of understanding and predicting cash flows for business decisions.

The appropriate section in the statement of cash flows for reporting the issuance of common stock for cash is:

In preparing a company's statement of cash flows for the most recent year on the indirect method,the following information is available: Net cash provided by operating activities was:

What are the five usual steps involved in the preparation of the statement of cash flows?

The purchase of long-term assets by issuing a note payable for the entire amount is reported on the statement of cash flows in the:

A company's transactions with its creditors to borrow money and/or to repay the principal amounts of both short- and long-term debt are reported as cash flows from:

The statement of cash flows explains the difference between the beginning and ending balances of cash and cash equivalents.

When using a spreadsheet to prepare the statement of cash flows,a decrease in accounts payable is entered in the Analysis of Changes columns with a debit in the statement of cash flows section and a credit in the balance sheet section.

Cash flows from selling trading securities are usually reported in the statement of cash flows as part of:

A company had average total assets of $2,316,000,total cash flows of $1,320,000,cash flows from operations of $455,000,and cash flows for plant assets of $850,000.The cash flow on total assets ratio equals:

The cash flow on total assets ratio reflects actual cash flows and is therefore affected by the accounting constraints of recognition and measurement for net income.

Weston is preparing the company's statement of cash flows for the fiscal year just ended.Using the following information,determine the amount of cash flows from operating activities using the indirect method:

The payment of cash dividends to shareholders is classified as a financing activity.

Define the cash flow on total assets ratio and explain how it is used to evaluate cash flows and to assess company performance.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

Filters