Question 1

The indirect method of computing operating cash flows effectively converts accrual accounting income to cash basis income as its starting point.

Accepted Answer

A) True 
 B)False

Question 2

EAE made the following cash outflows during 2012: $\begin{array} { l  }
 \text { Cash for EAE common stock dividends..}&\$14 \
 \text {Cash for capital assets }&100 \
 \text {Cash to retire EAE's bond principal. }&60 \
 \text {Cash to purchase common stock. }&30\
 \text {Cash to pay interest on EAE's bonds. }&8 \
\end{array}$
 What would be EAE's cash outflow for financing activities for 2012 (000s)?
Note: Under IFRS,dividends received may also be classified as operating cash flows.

Accepted Answer

Financing

Question 3

The gain on the sale of a long-term investment should be disclosed separately in a Statement of Cash Flows of a company with substantial operating profits as a(n):

Accepted Answer

A) Adjustment to net income in the reconciliation of net income to cash from operating activities. 
B) Outflow from operating activities. 
C) Outflow from investing activities. 
D) Inflow from financing activities. 
A) Adjustment to net income in the reconciliation of net income to cash from operating activities. 
B) Outflow from operating activities. 
C) Outflow from investing activities. 
D) Inflow from financing activities.

Question 4

If cash collected from customers for 2011 is $780,000 and accounts receivable increased by $20,000 during the year,calculate the amount of sales for 2011.

Accepted Answer

The answer of If cash collected from customers for 2011...

Question 5

A corporation paid $4,000 cash for rent.This payment should be reflected on the Statement of Cash Flows as a:

Accepted Answer

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

Question 6

Depreciation expense is not a source of cash or cash equivalents.

Accepted Answer

A) True 
 B)False

Question 7

SDB reported sales of $300,000,write-offs of uncollectible accounts of $10,000 against the allowance,and a decrease in net accounts receivable of $40,000 during 2013.What would be SDB's cash collected from customers during 2013?

Accepted Answer

A) $300,000 
B) $330,000 
C) $340,000 
D) $350,000 
A) $300,000 
B) $330,000 
C) $340,000 
D) $350,000

Question 8

Under IFRS,dividends paid may be classified as operating or financing activities.

Accepted Answer

A) True 
 B)False

Question 9

Writing off an uncollectible account against the allowance would increase cash from customers.

Accepted Answer

A) True 
 B)False

Question 10

KWB made the following cash outflows during 2011: $\begin{array}{lll}
\text {Cash for dividends on KWB common shares. }&\$5,000\
\text { Cash for capital assets..}&50,000\
\text {Cash for interest. }&3,000\
\text { Cash loaned to president of KWB.}&10,000\
\text {Cash for purchase of JCK common stock. }&40,000\
\end{array}$ Calculate KWB's cash outflow for investing activities for 2011.

Accepted Answer

The answer of KWB made the following cash outflows during...

Question 11

Given the following data,answer the questions that follow. Income Statement
For Year Ended 12/31/Y ear 2 $$\begin{array} {| l | r| } 
\hline \text { Net Sales..................... } & \$ 1,500,000 \
\hline \text { Cost of goods sold........... } & ( 800,000 ) \
\hline \text { Cash operating expenses..... } & ( 400,000 ) \
\hline \text { Depreciation and amortization expense............... } & ( 100,000 ) \
\hline \text { Gain on sale of equipment.... } & \underline { 60,000 } \
\hline \text { Net income.............. } & \$ 260,000 \
\hline
\end{array}$$ Additional Information:   1) What was cash from customers during year 2?
2) What was cash paid to suppliers during year 2?
3) What was net cash inflow from operating activities during year 2?
4) What was net cash inflow (outflow) from investing activities during year 2?
5) What was net cash inflow (outflow) from financing activities during year 2?

Accepted Answer

The answer of Given the following data,answer the questions that...

Question 12

Depreciation expense in the Statement of Cash Flows is reported under the investing section.

Accepted Answer

A) True 
 B)False

Question 13

The change in short-term payables to suppliers would be classified into which of the following categories for purposes of disclosure in the Statement of Cash Flows?

Accepted Answer

A) Operating cash flow 
B) Investing cash flow 
C) Financing cash flow 
D) Item reconciling earnings and operating cash flow 
E) Not a cash flow or reconciling item 
A) Operating cash flow 
B) Investing cash flow 
C) Financing cash flow 
D) Item reconciling earnings and operating cash flow 
E) Not a cash flow or reconciling item

Question 14

Assume cash paid to suppliers for 2011 is $420,000; that merchandise inventory increased by $20,000 during the year,and that cost of goods sold was $415,000 for 2011.During 2011,accounts payable must have:

Accepted Answer

A) Increased by $5,000 
B) Decreased by $5,000 
C) Increased by $15,000 
D) Decreased by $15,000 
A) Increased by $5,000 
B) Decreased by $5,000 
C) Increased by $15,000 
D) Decreased by $15,000

Question 15

Which of the following items involving current trade accounts receivable is most likely to appear in a Statement of Cash Flows?

Accepted Answer

A) Balance in allowance for uncollectible accounts 
B) Write-off of a specific account 
C) Sales returns and allowances 
D) Collection of an account previously written off 
E) Change in net sales 
A) Balance in allowance for uncollectible accounts 
B) Write-off of a specific account 
C) Sales returns and allowances 
D) Collection of an account previously written off 
E) Change in net sales

Question 16

The Statement of Cash Flows is not a required financial statement in the same sense as the income statement and balance sheet.

Accepted Answer

A) True 
 B)False

Question 17

JCB,Inc.has completed the Dec.31,2012 income statement,balance sheet,and retained earnings statement.The spreadsheet for the Statement of Cash Flows (direct method) has been started below.Complete the spreadsheet.   Additional data:
1.Purchased capital asset for $80 cash.
2.Sold capital asset for $150 cash (cost- $200; Acc.Depr.- $70).
3.Issued 10 common shares (MV - $15/share) to retire L-T notes payable.
4.Issued L-T notes payable for $100 cash.
5.Declared and paid cash dividends of $60.
Operating Activities:
Investing Activities:
Financing Activities:
Noncash Exchanges:
Incr.(Decr) in cash

Accepted Answer

JCB,Inc.Spreadsheet for Statem

Question 18

Under the direct method,cash paid to suppliers can be computed as cost of goods sold for the period:

Accepted Answer

A) Plus an increase in inventory and minus an increase in accounts payable. 
B) Plus a decrease in inventory and minus an increase in accounts payable. 
C) Minus an increase in inventory and plus an increase in accounts payable. 
D) Minus a decrease in inventory and plus an increase in accounts payable. 
A) Plus an increase in inventory and minus an increase in accounts payable. 
B) Plus a decrease in inventory and minus an increase in accounts payable. 
C) Minus an increase in inventory and plus an increase in accounts payable. 
D) Minus a decrease in inventory and plus an increase in accounts payable.

Question 19

Assume cash paid to suppliers for 2011 is $420,000,that merchandise inventory increased by $20,000 during the year,and that cost of goods sold was $415,000 for 2011.
Calculate the net change in accounts payable during 2011.

Accepted Answer

The answer of Assume cash paid to suppliers for 2011...

Question 20

All investments meeting the definition of cash equivalent must be so classified.

Accepted Answer

A) True 
 B)False

The indirect method of computing operating cash flows effectively converts accrual accounting income to cash basis income as its starting point.

The gain on the sale of a long-term investment should be disclosed separately in a Statement of Cash Flows of a company with substantial operating profits as a(n):

If cash collected from customers for 2011 is $780,000 and accounts receivable increased by $20,000 during the year,calculate the amount of sales for 2011.

A corporation paid $4,000 cash for rent.This payment should be reflected on the Statement of Cash Flows as a:

Depreciation expense is not a source of cash or cash equivalents.

SDB reported sales of $300,000,write-offs of uncollectible accounts of $10,000 against the allowance,and a decrease in net accounts receivable of $40,000 during 2013.What would be SDB's cash collected from customers during 2013?

Under IFRS,dividends paid may be classified as operating or financing activities.

Writing off an uncollectible account against the allowance would increase cash from customers.

Depreciation expense in the Statement of Cash Flows is reported under the investing section.

The change in short-term payables to suppliers would be classified into which of the following categories for purposes of disclosure in the Statement of Cash Flows?

Assume cash paid to suppliers for 2011 is $420,000; that merchandise inventory increased by $20,000 during the year,and that cost of goods sold was $415,000 for 2011.During 2011,accounts payable must have:

Which of the following items involving current trade accounts receivable is most likely to appear in a Statement of Cash Flows?

The Statement of Cash Flows is not a required financial statement in the same sense as the income statement and balance sheet.

Under the direct method,cash paid to suppliers can be computed as cost of goods sold for the period:

Assume cash paid to suppliers for 2011 is $420,000,that merchandise inventory increased by $20,000 during the year,and that cost of goods sold was $415,000 for 2011. Calculate the net change in accounts payable during 2011.

All investments meeting the definition of cash equivalent must be so classified.

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

The indirect method of computing operating cash flows effectively converts accrual accounting income to cash basis income as its starting point.

The gain on the sale of a long-term investment should be disclosed separately in a Statement of Cash Flows of a company with substantial operating profits as a(n):

If cash collected from customers for 2011 is $780,000 and accounts receivable increased by $20,000 during the year,calculate the amount of sales for 2011.

A corporation paid $4,000 cash for rent.This payment should be reflected on the Statement of Cash Flows as a:

Depreciation expense is not a source of cash or cash equivalents.

SDB reported sales of $300,000,write-offs of uncollectible accounts of $10,000 against the allowance,and a decrease in net accounts receivable of $40,000 during 2013.What would be SDB's cash collected from customers during 2013?

Under IFRS,dividends paid may be classified as operating or financing activities.

Writing off an uncollectible account against the allowance would increase cash from customers.

Depreciation expense in the Statement of Cash Flows is reported under the investing section.

The change in short-term payables to suppliers would be classified into which of the following categories for purposes of disclosure in the Statement of Cash Flows?

Assume cash paid to suppliers for 2011 is $420,000; that merchandise inventory increased by $20,000 during the year,and that cost of goods sold was $415,000 for 2011.During 2011,accounts payable must have:

Which of the following items involving current trade accounts receivable is most likely to appear in a Statement of Cash Flows?

The Statement of Cash Flows is not a required financial statement in the same sense as the income statement and balance sheet.

Under the direct method,cash paid to suppliers can be computed as cost of goods sold for the period:

Assume cash paid to suppliers for 2011 is $420,000,that merchandise inventory increased by $20,000 during the year,and that cost of goods sold was $415,000 for 2011. Calculate the net change in accounts payable during 2011.

All investments meeting the definition of cash equivalent must be so classified.

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