Question 1

Which one of the following would not be a cash outflow from financing activities for ABC Company?

Accepted Answer

A) Cash paid for dividends on ABC common stock. 
B) Cash paid for purchase of XYZ common stock. 
C) Cash paid for dividends on ABC preferred stock. 
D) Cash paid for interest on ABC bonds payable. 
A) Cash paid for dividends on ABC common stock. 
B) Cash paid for purchase of XYZ common stock. 
C) Cash paid for dividends on ABC preferred stock. 
D) Cash paid for interest on ABC bonds payable.

Question 2

If a company issues both a balance sheet and an income statement with comparative figures from last year,Statement of Cash Flows:

Accepted Answer

A) Should be issued for the current year only. 
B) Should be issued for each period for which an income statement is presented. 
C) is no longer necessary; but may be used at the company's option. 
D) Should not be issued. 
A) Should be issued for the current year only. 
B) Should be issued for each period for which an income statement is presented. 
C) is no longer necessary; but may be used at the company's option. 
D) Should not be issued.

Question 3

The amortization of patents should be presented in a Statement of Cash Flows as a(n):

Accepted Answer

A) inflow and outflow of cash. 
B) outflow of cash. 
C) addition to net income in the adjustments to reconcile net income to cash from operating activities. 
D) deduction from net income in the adjustments to reconcile net income to cash from operating activities. 
A) inflow and outflow of cash. 
B) outflow of cash. 
C) addition to net income in the adjustments to reconcile net income to cash from operating activities. 
D) deduction from net income in the adjustments to reconcile net income to cash from operating activities.

Question 4

In the preparation of a Statement of Cash Flows:

Accepted Answer

A) The statement must include most noncash exchanges. 
B) The statement must be prepared using the working capital definition of funds. 
C) Stock dividends and stock splits must be reported on the statement. 
D) The statement must be cumulative over the last two reporting periods. 
E) None of these answers are correct. 
A) The statement must include most noncash exchanges. 
B) The statement must be prepared using the working capital definition of funds. 
C) Stock dividends and stock splits must be reported on the statement. 
D) The statement must be cumulative over the last two reporting periods. 
E) None of these answers are correct.

Question 5

For which of the following accounts would the change during the year in that account not be found the reconciliation of net income and net operating cash flow?

Accepted Answer

A) Dividends payable 
B) Interest payable 
C) Prepaid rent 
D) Wages payable 
E) Short-term notes payable to supplier 
A) Dividends payable 
B) Interest payable 
C) Prepaid rent 
D) Wages payable 
E) Short-term notes payable to supplier

Question 6

On a reconciliation of net income to cash from operations,depreciation is treated as an adjustment to net income because depreciation:

Accepted Answer

A) is a direct outflow of cash. 
B) reduces net income but does not involve an outflow of cash. 
C) reduces net income and involves an outflow of cash. 
D) is an outflow of cash to a reserve account for replacement of assets. 
A) is a direct outflow of cash. 
B) reduces net income but does not involve an outflow of cash. 
C) reduces net income and involves an outflow of cash. 
D) is an outflow of cash to a reserve account for replacement of assets.

Question 7

The records of WXY provided the following information for the year ended December 31,2011:
(1) Purchased a warehouse and paid for it by issuing 1,000 common shares; market value was $35 per share.
(2) Inventory increased by $4,000.
(3) Accounts payable decreased by $6,000.
(4) Declared a cash dividend,$5,000.
(5) Depreciation expense,$2,000.
(6) Net income,$19,000.
(7) Loss on sale of machine,$3,000.
(8) On December 31,2001,paid insurance premium on all assets,for 2002 and 2003,$800.There was no prepaid insurance on January 1,2011.
Calculate the net cash inflow from operating activities for 2011.

Accepted Answer

@#IMG-DLM& Cash flow

Question 8

Assume cash paid to suppliers for 2011 is $350,000; merchandise inventory increased by $5,000 during the year,and accounts payable decreased by $10,000 during the year.What was cost of goods sold for 2011?

Accepted Answer

A) $335,000 
B) $345,000 
C) $355,000 
D) $365,000 
A) $335,000 
B) $345,000 
C) $355,000 
D) $365,000

Question 9

A firm purchased $20,000 worth of investments classified as securities available for sale.At the end of the year,the investments were worth $23,000.What is the correct disclosure of these events in the direct method Statement of Cash Flows?

Accepted Answer

A) Investing cash outflow, $20,000 
B) Add $17,000 in reconciliation of earnings and net operating cash flow 
C) Investing cash outflow, $20,000; subtract $3,000 in reconciliation of earnings and net operating cash flow 
D) No disclosure is needed 
A) Investing cash outflow, $20,000 
B) Add $17,000 in reconciliation of earnings and net operating cash flow 
C) Investing cash outflow, $20,000; subtract $3,000 in reconciliation of earnings and net operating cash flow 
D) No disclosure is needed

Question 10

MJC received the following cash inflows during 2012: $\begin{array} { l  }
 \text {Cash from customers. }& \$600\
 \text { Sales of investments in securities available for sale}&100 \
 \text {Sale of common stock }&70 \
 \text {Proceeds from bonds payable. }&400 \
 \text {Sale of patents. }&20 \
 \text {Interest received. }&4 \
\end{array}$
 What would be cash inflow from operating,investing,and financing activities,respectively,for 2012?
Note: Under IFRS,interest received may also be an investing activity.

Accepted Answer

Operating Cash flows: $600 + $

Question 11

The records of CDE provided the following information for the period ended December 31,2012:

Accepted Answer

@#IMG-DLM& Compute CDE's cash flow from

Question 12

Assume cash paid to suppliers for 2012 is $350,000,merchandise inventory increased by $5,000 during the year,and accounts payable decreased by $10,000 during the year.The COGS for 2012 is $335,000.

Accepted Answer

A) True 
 B)False

Question 13

In preparing the Statement of Cash Flows,which of the following transactions would be considered an investing activity?

Accepted Answer

A) sale of equipment at book value 
B) Sale of merchandise on credit 
C) Declaration of cash dividend 
D) Issuance of bonds payable at a discount 
A) sale of equipment at book value 
B) Sale of merchandise on credit 
C) Declaration of cash dividend 
D) Issuance of bonds payable at a discount

Question 14

Cash outflows from investing activities would include payments for all of the following except:

Accepted Answer

A) Purchase of capital assets. 
B) Investments in securities available for sale. 
C) Repurchase of common stock. 
D) Loans to other parties. 
A) Purchase of capital assets. 
B) Investments in securities available for sale. 
C) Repurchase of common stock. 
D) Loans to other parties.

Question 15

Two formats of presenting the Statement of Cash Flows are allowed under ASPE and IFRS.Describe the two formats and provide your own opinion on which results in a more complete picture of a firm's cash flows.

Accepted Answer

The direct and indirect formats are two

Question 16

How is depreciation expense treated in the Statement of Cash Flows and related disclosures when the statement is prepared using the indirect format?

Accepted Answer

A) added to net income 
B) subtracted from net income 
C) placed into the investing section 
D) does not appear because it is not a cash flow 
A) added to net income 
B) subtracted from net income 
C) placed into the investing section 
D) does not appear because it is not a cash flow

Question 17

RJB made inventory purchases amounting to $200,000 during 2014.During the year,its accounts payable (all of which arose from inventory purchases) increased by $20,000.The company had sales of $1,000,000 and is subject to a gross profit percentage of 90%.How much cash did RJB pay to its inventory suppliers during 2014?

Accepted Answer

A) $120,000 
B) $180,000 
C) $320,000 
D) $220,000 
A) $120,000 
B) $180,000 
C) $320,000 
D) $220,000

Question 18

ABC had the following balances on its Statement of Financial Position for Year 1:
Accounts Receivable,Jan 1,Year 1: $500
Accounts Receivable,Dec 31,Year 1: $400
Allowance for Doubtful Accounts,Jan 1,Year 1: $50cr
Allowance for Doubtful Accounts,Dec 31st,Year 1: $140cr
All sales during Year 1 were made on credit,in the amount of $1,000.Bad debt expense for the year was $100.
What were ABC's cash collections for Year1?

Accepted Answer

$500 + $1,

Question 19

If Harris Company issues both a balance sheet and an income statement with comparative figures from last year,a statement of cash flows should be issued for each period for which an income statement is presented.

Accepted Answer

A) True 
 B)False

Question 20

A Statement of Cash Flows is designed to help investors,creditors,and others to project a company's future cash flows.

Accepted Answer

A) True 
 B)False

Which one of the following would not be a cash outflow from financing activities for ABC Company?

If a company issues both a balance sheet and an income statement with comparative figures from last year,Statement of Cash Flows:

The amortization of patents should be presented in a Statement of Cash Flows as a(n):

In the preparation of a Statement of Cash Flows:

For which of the following accounts would the change during the year in that account not be found the reconciliation of net income and net operating cash flow?

On a reconciliation of net income to cash from operations,depreciation is treated as an adjustment to net income because depreciation:

Assume cash paid to suppliers for 2011 is $350,000; merchandise inventory increased by $5,000 during the year,and accounts payable decreased by $10,000 during the year.What was cost of goods sold for 2011?

A firm purchased $20,000 worth of investments classified as securities available for sale.At the end of the year,the investments were worth $23,000.What is the correct disclosure of these events in the direct method Statement of Cash Flows?

The records of CDE provided the following information for the period ended December 31,2012:

Assume cash paid to suppliers for 2012 is $350,000,merchandise inventory increased by $5,000 during the year,and accounts payable decreased by $10,000 during the year.The COGS for 2012 is $335,000.

In preparing the Statement of Cash Flows,which of the following transactions would be considered an investing activity?

Cash outflows from investing activities would include payments for all of the following except:

Two formats of presenting the Statement of Cash Flows are allowed under ASPE and IFRS.Describe the two formats and provide your own opinion on which results in a more complete picture of a firm's cash flows.

How is depreciation expense treated in the Statement of Cash Flows and related disclosures when the statement is prepared using the indirect format?

If Harris Company issues both a balance sheet and an income statement with comparative figures from last year,a statement of cash flows should be issued for each period for which an income statement is presented.

A Statement of Cash Flows is designed to help investors,creditors,and others to project a company's future cash flows.

The Framework for Financial Reporting

Accounting Judgements

Statements of Income and Comprehensive Income

Statements of Financial Position and Changes in Equity; Disclosure Notes

Financial Assets: Cash and Receivables

Cost-Based Inventories and Cost of Sales

Property,Plant,and Equipment; Intangibles; and Goodwill

Depreciation,Amortization,and Impairment

Financial Instruments: Investments in Debt and Equity Securities

Filters

Exam 5: The Statement of Cash Flows

Which one of the following would not be a cash outflow from financing activities for ABC Company?

If a company issues both a balance sheet and an income statement with comparative figures from last year,Statement of Cash Flows:

The amortization of patents should be presented in a Statement of Cash Flows as a(n):

In the preparation of a Statement of Cash Flows:

For which of the following accounts would the change during the year in that account not be found the reconciliation of net income and net operating cash flow?

On a reconciliation of net income to cash from operations,depreciation is treated as an adjustment to net income because depreciation:

Assume cash paid to suppliers for 2011 is $350,000; merchandise inventory increased by $5,000 during the year,and accounts payable decreased by $10,000 during the year.What was cost of goods sold for 2011?

A firm purchased $20,000 worth of investments classified as securities available for sale.At the end of the year,the investments were worth $23,000.What is the correct disclosure of these events in the direct method Statement of Cash Flows?

The records of CDE provided the following information for the period ended December 31,2012:

Assume cash paid to suppliers for 2012 is $350,000,merchandise inventory increased by $5,000 during the year,and accounts payable decreased by $10,000 during the year.The COGS for 2012 is $335,000.

In preparing the Statement of Cash Flows,which of the following transactions would be considered an investing activity?

Cash outflows from investing activities would include payments for all of the following except:

Two formats of presenting the Statement of Cash Flows are allowed under ASPE and IFRS.Describe the two formats and provide your own opinion on which results in a more complete picture of a firm's cash flows.

How is depreciation expense treated in the Statement of Cash Flows and related disclosures when the statement is prepared using the indirect format?

If Harris Company issues both a balance sheet and an income statement with comparative figures from last year,a statement of cash flows should be issued for each period for which an income statement is presented.

A Statement of Cash Flows is designed to help investors,creditors,and others to project a company's future cash flows.

The Framework for Financial Reporting

Accounting Judgements

Statements of Income and Comprehensive Income

Statements of Financial Position and Changes in Equity; Disclosure Notes

Financial Assets: Cash and Receivables

Cost-Based Inventories and Cost of Sales

Property,Plant,and Equipment; Intangibles; and Goodwill

Depreciation,Amortization,and Impairment

Financial Instruments: Investments in Debt and Equity Securities

Filters