Question 1

In a statement of cash flows,the sale of a long-term investment would ordinarily be classified as:

Accepted Answer

A)  an operating activity. 
B)  a financing activity. 
C)  an investing activity. 
D)  a lending activity. 
A)  an operating activity. 
B)  a financing activity. 
C)  an investing activity. 
D)  a lending activity.

Question 2

Cash payments to repay the principal amount of debt are reported as a cash outflow in the investing activities section of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 3

Klutz Dance Studio had net income of $167,000 for the year just ended.Klutz collected the following additional information to prepare its statement of cash flows for the year:
  Klutz uses the indirect method to prepare its statement of cash flows.What is Klutz's net cash provided by (used in)operating activities?

Accepted Answer

A)  $95,000 
B)  $137,000 
C)  $185,000 
D)  $207,000 
A)  $95,000 
B)  $137,000 
C)  $185,000 
D)  $207,000

Question 4

Manila Corporation's comparative balance sheet appears below:
   The company's net income (loss)for the year was $0 and its cash dividends were $2,000.It did not dispose of any property,plant,and equipment,issue any bonds payable,or repurchase any of its own common stock during the year.
Required:
Compute the change in each balance sheet account denoted with an asterisk (*).Indicate whether the change in each balance will be recorded in the operating,investing,or financing activities section of the statement of cash flows.For items recorded in the operating activities section,also indicate whether the change will be added to or subtracted from net income.For all other items,indicate whether the change will be added as a cash inflow or subtracted as a cash outflow.The first entry has been filled in as an example.

Accepted Answer

The answer of Manila Corporation's comparative balance sheet appears below:
...

Question 5

The most recent comparative balance sheet of Giacomelli Corporation appears below:
   The company uses the indirect method to construct the operating activities section of its statement of cash flows.
-Which of the following is correct regarding the operating activities section of the statement of cash flows?

Accepted Answer

A)  The change in Accounts Receivable will be subtracted from net income; The change in Inventory will be added to net income 
B)  The change in Accounts Receivable will be added to net income; The change in Inventory will be subtracted from net income 
C)  The change in Accounts Receivable will be added to net income; The change in Inventory will be added to net income 
D)  The change in Accounts Receivable will be subtracted from net income; The change in Inventory will be subtracted from net income 
A)  The change in Accounts Receivable will be subtracted from net income; The change in Inventory will be added to net income 
B)  The change in Accounts Receivable will be added to net income; The change in Inventory will be subtracted from net income 
C)  The change in Accounts Receivable will be added to net income; The change in Inventory will be added to net income 
D)  The change in Accounts Receivable will be subtracted from net income; The change in Inventory will be subtracted from net income

Question 6

Paying interest to lenders is classified as an operating activity on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 7

Beltram Corporation's balance sheet and income statement appear below:
     The company did not dispose of any property,plant,and equipment,issue any bonds payable,or repurchase any of its own common stock during the year.The company declared and paid a cash dividend of $13.
Required:
Prepare a statement of cash flows in good form using the indirect method.

Accepted Answer

The answer of Beltram Corporation's balance sheet and income statement...

Question 8

Spackel Corporation recorded the following events last year:
   On the statement of cash flows, some of these events are classified as operating activities, some are classified as investing activities, and some are classified as financing activities.
-Based solely on the information above,the net cash provided by (used in)investing activities on the statement of cash flows would be:

Accepted Answer

A)  $(280,000) 
B)  $(390,000) 
C)  $(760,000) 
D)  $(1,286,000) 
A)  $(280,000) 
B)  $(390,000) 
C)  $(760,000) 
D)  $(1,286,000)

Question 9

The most recent balance sheet and income statement of Penaloza Corporation appear below:
     The company paid a cash dividend of $18. It did not dispose of any property, plant, and equipment. The company did not retire any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows.
-The net cash provided by (used in)operating activities for the year was:

Accepted Answer

A)  $117 
B)  $45 
C)  $36 
D)  $116 
A)  $117 
B)  $45 
C)  $36 
D)  $116

Question 10

Excerpts from Neuwirth Corporation's comparative balance sheet appear below:
  Which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method?

Accepted Answer

A)  The change in Accounts Receivable is added to net income; The change in Inventory is added to net income 
B)  The change in Accounts Receivable is added to net income; The change in Inventory is subtracted from net income 
C)  The change in Accounts Receivable is subtracted from net income; The change in Inventory is subtracted from net income 
D)  The change in Accounts Receivable is subtracted from net income; The change in Inventory is added to net income 
A)  The change in Accounts Receivable is added to net income; The change in Inventory is added to net income 
B)  The change in Accounts Receivable is added to net income; The change in Inventory is subtracted from net income 
C)  The change in Accounts Receivable is subtracted from net income; The change in Inventory is subtracted from net income 
D)  The change in Accounts Receivable is subtracted from net income; The change in Inventory is added to net income

Question 11

In the statement of cash flows,collecting cash from customers is treated as a cash inflow in the financing activities section.

Accepted Answer

A) True 
 B)False

Question 12

Carriveau Corporation's most recent balance sheet appears below:
  Net income for the year was $172.Cash dividends were $35.The company did not sell or retire any property,plant,and equipment during the year.The net cash provided by (used in)operating activities for the year was:

Accepted Answer

A)  $183 
B)  $246 
C)  $(11) 
D)  $161 
A)  $183 
B)  $246 
C)  $(11) 
D)  $161

Question 13

The following events occurred last year for the Cart Corporation:
  Based solely on the above information,the net cash provided by (used in)financing activities for the year on the statement of cash flows was:

Accepted Answer

A)  $12,000 
B)  $24,000 
C)  $20,000 
D)  $49,000 
A)  $12,000 
B)  $24,000 
C)  $20,000 
D)  $49,000

Question 14

Under the indirect method of determining the net cash provided by operating activities on the statement of cash flows,an increase in accounts receivable would be subtracted from net income.

Accepted Answer

A) True 
 B)False

Question 15

Megan Corporation's net income last year was $98,000. Changes in the company's balance sheet accounts for the year appear below:
   The company paid a cash dividend of $36,000 and it did not dispose of any long-term investments or property, plant, and equipment. The company did not issue any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows.
-The net cash provided by (used in)investing activities last year was:

Accepted Answer

A)  $115,000 
B)  $(115,000) 
C)  $135,000 
D)  $(135,000) 
A)  $115,000 
B)  $(115,000) 
C)  $135,000 
D)  $(135,000)

Question 16

The direct method of preparing the statement of cash flows will show the same increase or decrease in cash as the indirect method.

Accepted Answer

A) True 
 B)False

Question 17

Salsedo Corporation's balance sheet and income statement appear below:
     Cash dividends were $9. The company sold equipment for $15 that was originally purchased for $10 and that had accumulated depreciation of $5. It did not issue any bonds payable or repurchase any of its own common stock.
-The net cash provided by (used in)financing activities for the year was:

Accepted Answer

A)  $(9) 
B)  $(15) 
C)  $(21) 
D)  $3 
A)  $(9) 
B)  $(15) 
C)  $(21) 
D)  $3

Question 18

Which one of the following transactions should be classified as a financing activity on the statement of cash flows?

Accepted Answer

A)  Purchase of equipment. 
B)  Purchase of the company's own stock. 
C)  Sale of a long-term investment. 
D)  Payment of interest to a lender. 
A)  Purchase of equipment. 
B)  Purchase of the company's own stock. 
C)  Sale of a long-term investment. 
D)  Payment of interest to a lender.

Question 19

Klicker Corporation's most recent balance sheet appears below:
  The company's net income for the year was $152 and it did not issue any bonds or repurchase any of its common stock during the year.Cash dividends were $40.The net cash provided by (used in)financing activities for the year was:

Accepted Answer

A)  ($49) 
B)  ($40) 
C)  $4 
D)  ($13) 
A)  ($49) 
B)  ($40) 
C)  $4 
D)  ($13)

Question 20

Free cash flow will increase if a company increases its accounts payable balance by delaying payments to suppliers.

Accepted Answer

A) True 
 B)False

Exam 14: Statement of Cash Flows

In a statement of cash flows,the sale of a long-term investment would ordinarily be classified as:

Cash payments to repay the principal amount of debt are reported as a cash outflow in the investing activities section of the statement of cash flows.

Paying interest to lenders is classified as an operating activity on the statement of cash flows.

Excerpts from Neuwirth Corporation's comparative balance sheet appear below: Which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method?

In the statement of cash flows,collecting cash from customers is treated as a cash inflow in the financing activities section.

Carriveau Corporation's most recent balance sheet appears below: Net income for the year was $172.Cash dividends were $35.The company did not sell or retire any property,plant,and equipment during the year.The net cash provided by (used in)operating activities for the year was:

The following events occurred last year for the Cart Corporation: Based solely on the above information,the net cash provided by (used in)financing activities for the year on the statement of cash flows was:

Under the indirect method of determining the net cash provided by operating activities on the statement of cash flows,an increase in accounts receivable would be subtracted from net income.

The direct method of preparing the statement of cash flows will show the same increase or decrease in cash as the indirect method.

Which one of the following transactions should be classified as a financing activity on the statement of cash flows?

Klicker Corporation's most recent balance sheet appears below: The company's net income for the year was $152 and it did not issue any bonds or repurchase any of its common stock during the year.Cash dividends were $40.The net cash provided by (used in)financing activities for the year was:

Free cash flow will increase if a company increases its accounts payable balance by delaying payments to suppliers.

Managerial Accounting and Cost Concepts

Job-Order Costing: Calculating Unit Production Costs

Job-Order Costing: Cost Flows and External Reporting

Process Costing

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Super-Variable Costing

Master Budgeting

Flexible Budgets and Performance Analysis

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Financial Statement Analysis

Cost of Quality

Activity-Based Absorption Costing

The Predetermined Overhead Rate and Capacity

Job-Order Costing: a Microsoft Excel-Based Approach

Fifo Method

Service Department Allocations

Analyzing Mixed Costs

Time-Driven Activity-Based Costing: a Microsoft Excel-Based Approach

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Standard Cost Systems: a Financial Reporting Perspective Using Microsoft Excel

Transfer Pricing

Service Department Charges

Pricing Decisions

The Concept of Present Value

Income Taxes and the Present Value Method

the Direct Method of Determining the Net Cash Provided by Operating Activities

Filters