Question 1

Cash paid for income taxes under the direct method would be income tax expense minus:

Accepted Answer

A) An increase in income taxes payable. 
B) A decrease in income taxes payable. 
C) Beginning income taxes payable. 
D) Ending income taxes payable. 
A) An increase in income taxes payable. 
B) A decrease in income taxes payable. 
C) Beginning income taxes payable. 
D) Ending income taxes payable.

Question 2

A firm reported the following in its 2011 financial statements: $\begin{array}{lll}
\text { Balance sheet } & \text { Dec.31/10 } & \text { Dec.31/11 } \
\text { Unearned rent. } & \$ 10,000 & \$ 17,000
\end{array}$ Income statement Rent revenue.$\quad\quad \$ 92,000 $ (a) Describe the required disclosure implied by the above information for the indirect method Statement of Cash Flows for 2001,including the reconciliation of net income and net operating cash flow.
(b) Explain as completely as possible the reasoning for your response in (a).
(c) Describe the required disclosure implied by the above information for the direct method Statement of Cash Flows for 2011,omitting any reference to the reconciliation of net income and net operating cash flow.

Accepted Answer

(a) Add increase in unearned rent $7,000

Question 3

Which one of the following statement does not primarily report changes in amounts or accounts?

Accepted Answer

A) Statement of Cash Flows 
B) Balance sheet 
C) Income statement 
D) Statement of retained earnings 
A) Statement of Cash Flows 
B) Balance sheet 
C) Income statement 
D) Statement of retained earnings

Question 4

Under IFRS,interest received may be classified as operating or financing activities.

Accepted Answer

A) True 
 B)False

Question 5

A corporation is preparing a Statement of Cash Flows.Complete the following part of it in the spaces provided (be sure to indicate + or -):

Accepted Answer

Operating

Question 6

A firm's dividends payable account increased $10,000 during the year.The firm also declared $35,000 of dividends.What is the complete disclosure in the direct method Statement of Cash Flows for these events?

Accepted Answer

A) $25,000 financing cash outflow; $10,000 addition reconciling adjustment 
B) $45,000 financing cash outflow 
C) $25,000 financing cash outflow 
D) $35,000 financing cash outflow 
E) $25,000 financing cash outflow; $10,000 subtraction reconciling adjustment 
A) $25,000 financing cash outflow; $10,000 addition reconciling adjustment 
B) $45,000 financing cash outflow 
C) $25,000 financing cash outflow 
D) $35,000 financing cash outflow 
E) $25,000 financing cash outflow; $10,000 subtraction reconciling adjustment

Question 7

Under IFRS,dividends paid may be classified as:

Accepted Answer

A) Operating activities. 
B) Financing Activities. 
C) Investing Activities. 
D) Operating activities or financing activities. 
E) Operating activities or investing activities. 
A) Operating activities. 
B) Financing Activities. 
C) Investing Activities. 
D) Operating activities or financing activities. 
E) Operating activities or investing activities.

Question 8

What effect does the write-off of an account receivable have on the Statement of Cash Flows?

Accepted Answer

A) A decrease to operating cash flows under the direct method. 
B) A decrease to operating cash flows under the indirect method. 
C) A decrease to financing cash flows. 
D) There is no effect. 
A) A decrease to operating cash flows under the direct method. 
B) A decrease to operating cash flows under the indirect method. 
C) A decrease to financing cash flows. 
D) There is no effect.

Question 9

When using the direct method for reporting operating activities,which of the following would represent a cash-paid item?

Accepted Answer

A) Depreciation expense, adjusted for changes in depreciation methods 
B) Patent amortization expense, adjusted for changes in estimates 
C) Interest expense, adjusted for changes in interest payable and amortization of bond premiums or discounts 
D) Loss on sale of plant assets 
E) Gain on sale of plant assets 
A) Depreciation expense, adjusted for changes in depreciation methods 
B) Patent amortization expense, adjusted for changes in estimates 
C) Interest expense, adjusted for changes in interest payable and amortization of bond premiums or discounts 
D) Loss on sale of plant assets 
E) Gain on sale of plant assets

Question 10

Examples of cash equivalents are treasury bills,money market funds,and commercial paper.

Accepted Answer

A) True 
 B)False

Question 11

Sale for cash of a short-term investment at its cost would cause an inflow of cash.

Accepted Answer

A) True 
 B)False

Question 12

A firm's dividends payable account increased $10,000 during the year.The firm also declared $35,000 of dividends.
Present the complete disclosure of these events in the direct format Statement of Cash Flows.

Accepted Answer

@#IMG-DLM& This is a

Question 13

An asset (land) was purchased and payment in full was made by issuing the company's common shares.No cash was paid.Therefore,this transaction should be reported on the Statement of Cash Flows:

Accepted Answer

A) as an "Adjustment to reconcile net income to operating activities." 
B) should not be reported on the Statement of Cash Flows but details explained in the disclosure notes. 
C) as an outflow of cash. 
D) As a non-cash exchange. 
A) as an "Adjustment to reconcile net income to operating activities." 
B) should not be reported on the Statement of Cash Flows but details explained in the disclosure notes. 
C) as an outflow of cash. 
D) As a non-cash exchange.

Question 14

Which of the following would not be a cash-paid item using the direct method for reporting operating activities?

Accepted Answer

A) Depreciation expense 
B) Cash paid to suppliers 
C) Cash paid for income taxes 
D) Cash paid for interest 
A) Depreciation expense 
B) Cash paid to suppliers 
C) Cash paid for income taxes 
D) Cash paid for interest

Question 15

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 31,2011,paid insurance premium on all assets,for 2012 and 2013,$800.There was no prepaid insurance on January 1,2011.
What was the net cash inflow from operating activities for 2011?

Accepted Answer

A) $7,200 
B) $13,200 
C) $16,200 
D) $21,200 
A) $7,200 
B) $13,200 
C) $16,200 
D) $21,200

Question 16

DBB reported cost of goods sold for 2013 of $600,000; merchandise inventory decreased by $20,000 during the year,and accounts payable decreased by $30,000 during the year.What would be DBB's cash paid to suppliers for 2013?

Accepted Answer

A) $550,000 
B) $590,000 
C) $600,000 
D) $610,000 
E) $650,000 
A) $550,000 
B) $590,000 
C) $600,000 
D) $610,000 
E) $650,000

Question 17

VJC received the following cash inflows during 2012:   What would be VJC's cash inflow from investing and financing activities,respectively,for 2011 under IFRS?
Note: Under IFRS,dividends received may also be classified as operating cash flows.

Accepted Answer

The answer of VJC received the following cash inflows during...

Question 18

MDB reported sales of $800,000,bad debt expense (allowance method) of $30,000,and an increase in net accounts receivable of $120,000 during 2013.What is MDB's cash collected from customers for 2013 if MDB did not record any write-offs during the period?

Accepted Answer

A) $650,000 
B) $680,000 
C) $710,000 
D) $800,000 
A) $650,000 
B) $680,000 
C) $710,000 
D) $800,000

Question 19

A corporation recorded the following entry:   How would this transaction be shown on a Statement of Cash Flows?

Accepted Answer

A) Cash outflow for operating activities 
B) Cash outflow for investing activities 
C) Cash outflow for financing activities 
D) Cash inflow for financing activities 
A) Cash outflow for operating activities 
B) Cash outflow for investing activities 
C) Cash outflow for financing activities 
D) Cash inflow for financing activities

Question 20

Under ASPE,dividends paid must be classified as a financing activity.

Accepted Answer

A) True 
 B)False

Cash paid for income taxes under the direct method would be income tax expense minus:

Which one of the following statement does not primarily report changes in amounts or accounts?

Under IFRS,interest received may be classified as operating or financing activities.

A corporation is preparing a Statement of Cash Flows.Complete the following part of it in the spaces provided (be sure to indicate + or -):

A firm's dividends payable account increased $10,000 during the year.The firm also declared $35,000 of dividends.What is the complete disclosure in the direct method Statement of Cash Flows for these events?

Under IFRS,dividends paid may be classified as:

What effect does the write-off of an account receivable have on the Statement of Cash Flows?

When using the direct method for reporting operating activities,which of the following would represent a cash-paid item?

Examples of cash equivalents are treasury bills,money market funds,and commercial paper.

Sale for cash of a short-term investment at its cost would cause an inflow of cash.

A firm's dividends payable account increased $10,000 during the year.The firm also declared $35,000 of dividends. Present the complete disclosure of these events in the direct format Statement of Cash Flows.

An asset (land) was purchased and payment in full was made by issuing the company's common shares.No cash was paid.Therefore,this transaction should be reported on the Statement of Cash Flows:

Which of the following would not be a cash-paid item using the direct method for reporting operating activities?

DBB reported cost of goods sold for 2013 of $600,000; merchandise inventory decreased by $20,000 during the year,and accounts payable decreased by $30,000 during the year.What would be DBB's cash paid to suppliers for 2013?

VJC received the following cash inflows during 2012: What would be VJC's cash inflow from investing and financing activities,respectively,for 2011 under IFRS? Note: Under IFRS,dividends received may also be classified as operating cash flows.

MDB reported sales of $800,000,bad debt expense (allowance method) of $30,000,and an increase in net accounts receivable of $120,000 during 2013.What is MDB's cash collected from customers for 2013 if MDB did not record any write-offs during the period?

A corporation recorded the following entry: How would this transaction be shown on a Statement of Cash Flows?

Under ASPE,dividends paid must be classified as a financing activity.

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

Cash paid for income taxes under the direct method would be income tax expense minus:

Which one of the following statement does not primarily report changes in amounts or accounts?

Under IFRS,interest received may be classified as operating or financing activities.

A corporation is preparing a Statement of Cash Flows.Complete the following part of it in the spaces provided (be sure to indicate + or -):

A firm's dividends payable account increased $10,000 during the year.The firm also declared $35,000 of dividends.What is the complete disclosure in the direct method Statement of Cash Flows for these events?

Under IFRS,dividends paid may be classified as:

What effect does the write-off of an account receivable have on the Statement of Cash Flows?

When using the direct method for reporting operating activities,which of the following would represent a cash-paid item?

Examples of cash equivalents are treasury bills,money market funds,and commercial paper.

Sale for cash of a short-term investment at its cost would cause an inflow of cash.

A firm's dividends payable account increased $10,000 during the year.The firm also declared $35,000 of dividends. Present the complete disclosure of these events in the direct format Statement of Cash Flows.

An asset (land) was purchased and payment in full was made by issuing the company's common shares.No cash was paid.Therefore,this transaction should be reported on the Statement of Cash Flows:

Which of the following would not be a cash-paid item using the direct method for reporting operating activities?

DBB reported cost of goods sold for 2013 of $600,000; merchandise inventory decreased by $20,000 during the year,and accounts payable decreased by $30,000 during the year.What would be DBB's cash paid to suppliers for 2013?

VJC received the following cash inflows during 2012: What would be VJC's cash inflow from investing and financing activities,respectively,for 2011 under IFRS? Note: Under IFRS,dividends received may also be classified as operating cash flows.

MDB reported sales of $800,000,bad debt expense (allowance method) of $30,000,and an increase in net accounts receivable of $120,000 during 2013.What is MDB's cash collected from customers for 2013 if MDB did not record any write-offs during the period?

A corporation recorded the following entry: How would this transaction be shown on a Statement of Cash Flows?

Under ASPE,dividends paid must be classified as a financing activity.

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