Question 1

A cash outflow will be generated by an increase in a liability.

Accepted Answer

A) True 
 B)False  False

Question 2

Match the ratio that goes with each formula.
-$\frac {\text {Operating Cash Flow  }} { \text {Cash Dividends} }$

Accepted Answer

A) Operating cash flow/current maturities of long-term debt and current notes payable 
B) Operating cash flow/total debt 
C) Operating cash flow per share 
D) Operating cash flow/cash dividends 
A) Operating cash flow/current maturities of long-term debt and current notes payable 
B) Operating cash flow/total debt 
C) Operating cash flow per share 
D) Operating cash flow/cash dividends D

Question 3

In a statement of cash flows (indirect method),depreciation expense should be presented as:

Accepted Answer

A) a cash flow from financing activities. 
B) a cash flow from investing activities. 
C) a deduction from net income. 
D) an addition to net income. 
E) a financial activity. 
A) a cash flow from financing activities. 
B) a cash flow from investing activities. 
C) a deduction from net income. 
D) an addition to net income. 
E) a financial activity. D

Question 4

Depreciation expense reduces operating income but does not require the use of cash.

Accepted Answer

A) True 
 B)False

Question 5

Cash flow per share can be viewed as a substitute for earnings per share in terms of a firm's profitability.

Accepted Answer

A) True 
 B)False

Question 6

Amortization of patents can be added to income in the operations section of the statement of cash flows because:

Accepted Answer

A) it is not a tax deductible expense. 
B) it results in an increase in income. 
C) it does not require the outlay of cash. 
D) patent amortization is not an expense. 
E) it represents an inflow of cash. 
A) it is not a tax deductible expense. 
B) it results in an increase in income. 
C) it does not require the outlay of cash. 
D) patent amortization is not an expense. 
E) it represents an inflow of cash.

Question 7

MATCHING
Indicate whether each of the following would be under Operating,Investing,Financing,or whether the item would not appear on the statement of cash flows.
-Issuance of long-term debt for cash

Accepted Answer

A) Operating 
B) Investing 
C) Financing 
D) Item would not appear 
A) Operating 
B) Investing 
C) Financing 
D) Item would not appear

Question 8

Which of the following is the focus for the statement of cash flows?

Accepted Answer

A) Cash 
B) Cash and cash equivalents 
C) Current assets 
D) Working capital 
E) None of the answers are correct. 
A) Cash 
B) Cash and cash equivalents 
C) Current assets 
D) Working capital 
E) None of the answers are correct.

Question 9

MATCHING
Indicate whether each of the following would be under Operating,Investing,Financing,or whether the item would not appear on the statement of cash flows.
-Collection of accounts receivable

Accepted Answer

A) Operating 
B) Investing 
C) Financing 
D) Item would not appear 
A) Operating 
B) Investing 
C) Financing 
D) Item would not appear

Question 10

MATCHING
Indicate whether each of the following would be under Operating,Investing,Financing,or whether the item would not appear on the statement of cash flows.
-Purchase of treasury stock

Accepted Answer

A) Operating 
B) Investing 
C) Financing 
D) Item would not appear 
A) Operating 
B) Investing 
C) Financing 
D) Item would not appear

Question 11

Which of the following accounts is not part of working capital?

Accepted Answer

A) Cash 
B) Accounts receivable 
C) Inventory 
D) Accounts payable 
E) Investments 
A) Cash 
B) Accounts receivable 
C) Inventory 
D) Accounts payable 
E) Investments

Question 12

Conroy Company had sales of $50,000,increase in accounts payable of $4,000,decrease in accounts receivable of $3,000,tax expense of $5,000,and an increase in taxes payable of $1,000.What was the cash outflow for taxes?

Accepted Answer

A) $54,000 
B) $4,000 
C) $6,000 
D) $53,000 
E) $45,000 
A) $54,000 
B) $4,000 
C) $6,000 
D) $53,000 
E) $45,000

Question 13

Working capital is defined as:

Accepted Answer

A) total assets less intangible assets. 
B) current assets divided by current liabilities. 
C) current assets less current liabilities. 
D) total assets less current assets. 
E) current assets less liabilities. 
A) total assets less intangible assets. 
B) current assets divided by current liabilities. 
C) current assets less current liabilities. 
D) total assets less current assets. 
E) current assets less liabilities.

Question 14

The acquisition of land using notes payable is an example of a noncash transaction.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is not a purpose of the statement of cash flows?

Accepted Answer

A) To show cash flow from operations 
B) To show cash flow from financing activities 
C) To show cash flow from investing activities 
D) To show all investing and financing transactions 
E) To show operating expenses for a period of time 
A) To show cash flow from operations 
B) To show cash flow from financing activities 
C) To show cash flow from investing activities 
D) To show all investing and financing transactions 
E) To show operating expenses for a period of time

Question 16

Within an individual account,there may be an explanation of both a source and a use of cash.

Accepted Answer

A) True 
 B)False

Question 17

MATCHING
Indicate whether each of the following would be under Operating,Investing,Financing,or whether the item would not appear on the statement of cash flows.
-Payment of cash dividend

Accepted Answer

A) Operating 
B) Investing 
C) Financing 
D) Item would not appear 
A) Operating 
B) Investing 
C) Financing 
D) Item would not appear

Question 18

MATCHING
Indicate whether each of the following would be under Operating,Investing,Financing,or whether the item would not appear on the statement of cash flows.
-Sale of inventory for cash

Accepted Answer

A) Operating 
B) Investing 
C) Financing 
D) Item would not appear 
A) Operating 
B) Investing 
C) Financing 
D) Item would not appear

Question 19

Francis Company had operating expenses of $20,000 and depreciation expenses of $4,000.Assuming no other transactions,what was the cash paid for operating expenses?

Accepted Answer

A) $24,000 
B) $22,000 
C) $16,000 
D) $20,400 
E) $23,000 
A) $24,000 
B) $22,000 
C) $16,000 
D) $20,400 
E) $23,000

Question 20

The conversion of long-term bonds into common stock is an example of a transaction involving two financing activities with no cash flow effect.

Accepted Answer

A) True 
 B)False

A cash outflow will be generated by an increase in a liability.

Match the ratio that goes with each formula. - $\frac {\text {Operating Cash Flow }} { \text {Cash Dividends} }$

In a statement of cash flows (indirect method),depreciation expense should be presented as:

Depreciation expense reduces operating income but does not require the use of cash.

Cash flow per share can be viewed as a substitute for earnings per share in terms of a firm's profitability.

Amortization of patents can be added to income in the operations section of the statement of cash flows because:

MATCHING Indicate whether each of the following would be under Operating,Investing,Financing,or whether the item would not appear on the statement of cash flows. -Issuance of long-term debt for cash

Which of the following is the focus for the statement of cash flows?

MATCHING Indicate whether each of the following would be under Operating,Investing,Financing,or whether the item would not appear on the statement of cash flows. -Collection of accounts receivable

MATCHING Indicate whether each of the following would be under Operating,Investing,Financing,or whether the item would not appear on the statement of cash flows. -Purchase of treasury stock

Which of the following accounts is not part of working capital?

Conroy Company had sales of $50,000,increase in accounts payable of $4,000,decrease in accounts receivable of $3,000,tax expense of $5,000,and an increase in taxes payable of $1,000.What was the cash outflow for taxes?

Working capital is defined as:

The acquisition of land using notes payable is an example of a noncash transaction.

Which of the following is not a purpose of the statement of cash flows?

Within an individual account,there may be an explanation of both a source and a use of cash.

MATCHING Indicate whether each of the following would be under Operating,Investing,Financing,or whether the item would not appear on the statement of cash flows. -Payment of cash dividend

MATCHING Indicate whether each of the following would be under Operating,Investing,Financing,or whether the item would not appear on the statement of cash flows. -Sale of inventory for cash

Francis Company had operating expenses of $20,000 and depreciation expenses of $4,000.Assuming no other transactions,what was the cash paid for operating expenses?

The conversion of long-term bonds into common stock is an example of a transaction involving two financing activities with no cash flow effect.

Introduction to Financial Reporting

Introduction to Financial Statements and Other Financial Reporting Topics

Balance Sheet

Income Statement

Basics of Analysis

Liquidity of Short-Term Assets;related Debt-Paying Ability

Long-Term Debt-Paying Ability

Profitability

For the Investor

Expanded Analysis

Special Industries: Banks, utilities, oil and Gas, transportation, insurance, real Estate Companies

Personal Financial Statements and Accounting for Governments and Not-For-Profit Organizations

Filters

Exam 10: Statement of Cash Flows

A cash outflow will be generated by an increase in a liability.

Match the ratio that goes with each formula. - Operating Cash Flow Cash Dividends\frac {\text {Operating Cash Flow }} { \text {Cash Dividends} }Cash DividendsOperating Cash Flow ​

In a statement of cash flows (indirect method),depreciation expense should be presented as:

Depreciation expense reduces operating income but does not require the use of cash.

Cash flow per share can be viewed as a substitute for earnings per share in terms of a firm's profitability.

Amortization of patents can be added to income in the operations section of the statement of cash flows because:

MATCHING Indicate whether each of the following would be under Operating,Investing,Financing,or whether the item would not appear on the statement of cash flows. -Issuance of long-term debt for cash

Which of the following is the focus for the statement of cash flows?

MATCHING Indicate whether each of the following would be under Operating,Investing,Financing,or whether the item would not appear on the statement of cash flows. -Collection of accounts receivable

MATCHING Indicate whether each of the following would be under Operating,Investing,Financing,or whether the item would not appear on the statement of cash flows. -Purchase of treasury stock

Which of the following accounts is not part of working capital?

Conroy Company had sales of $50,000,increase in accounts payable of $4,000,decrease in accounts receivable of $3,000,tax expense of $5,000,and an increase in taxes payable of $1,000.What was the cash outflow for taxes?

Working capital is defined as:

The acquisition of land using notes payable is an example of a noncash transaction.

Which of the following is not a purpose of the statement of cash flows?

Within an individual account,there may be an explanation of both a source and a use of cash.

MATCHING Indicate whether each of the following would be under Operating,Investing,Financing,or whether the item would not appear on the statement of cash flows. -Payment of cash dividend

MATCHING Indicate whether each of the following would be under Operating,Investing,Financing,or whether the item would not appear on the statement of cash flows. -Sale of inventory for cash

Francis Company had operating expenses of $20,000 and depreciation expenses of $4,000.Assuming no other transactions,what was the cash paid for operating expenses?

The conversion of long-term bonds into common stock is an example of a transaction involving two financing activities with no cash flow effect.

Introduction to Financial Reporting

Introduction to Financial Statements and Other Financial Reporting Topics

Balance Sheet

Income Statement

Basics of Analysis

Liquidity of Short-Term Assets;related Debt-Paying Ability

Long-Term Debt-Paying Ability

Profitability

For the Investor

Expanded Analysis

Special Industries: Banks, utilities, oil and Gas, transportation, insurance, real Estate Companies

Personal Financial Statements and Accounting for Governments and Not-For-Profit Organizations

Filters

Match the ratio that goes with each formula. - $\frac {\text {Operating Cash Flow }} { \text {Cash Dividends} }$