Question 1

Days -sales-in-inventory is calculated by dividing cost of goods sold by 365.

Accepted Answer

A) True 
 B)False  False

Question 2

A Statement of Cash Flows would NOT disclose:

Accepted Answer

A) stock dividends declared. 
B) bonds payable issued. 
C) purchase of treasury stock. 
D) capital stock issued. 
A) stock dividends declared. 
B) bonds payable issued. 
C) purchase of treasury stock. 
D) capital stock issued. A

Question 3

Some investing and financing activities involve no Cash Flows,so they:

Accepted Answer

A) represent no significant financial change. 
B) should be included in the three main sections of the Statement of Cash Flows. 
C) should be reported in a separate section of the cash flow statement. 
D) must be converted to cash at the end of the accounting period. 
A) represent no significant financial change. 
B) should be included in the three main sections of the Statement of Cash Flows. 
C) should be reported in a separate section of the cash flow statement. 
D) must be converted to cash at the end of the accounting period. C

Question 4

Business transactions that do NOT involve the payment or receipt of cash are considered to be non-cash transactions.

Accepted Answer

A) True 
 B)False

Question 5

Gains and losses on the sale of plant,property and equipment are ignored in the direct method of preparing a Statement of Cash Flows.

Accepted Answer

A) True 
 B)False

Question 6

Operating expenses-other than depreciation-for the year were $280,000.Prepaid expenses increased by $16,000.Cash payments for operating expenses to be reported on the cash flow statement using the direct method would be:

Accepted Answer

A) $296,000. 
B) $16,000. 
C) $264,000. 
D) $280.000. 
A) $296,000. 
B) $16,000. 
C) $264,000. 
D) $280.000.

Question 7

The records of Eclectic Lighting showed a net loss of $30,000;depreciation expense of $25,000;and an increase in supplies on hand of $5,000.The amount of net cash flow from operating activities using the indirect method is:

Accepted Answer

A) ($15,000). 
B) ($10,000). 
C) $15,000. 
D) $20,000. 
A) ($15,000). 
B) ($10,000). 
C) $15,000. 
D) $20,000.

Question 8

Depreciation of factory equipment under the direct method would be reported as a(n):

Accepted Answer

A) investing activity. 
B) operating activity. 
C) financing activity. 
D) It is not reported. 
A) investing activity. 
B) operating activity. 
C) financing activity. 
D) It is not reported.

Question 9

Cash receipts from the sale of long-term assets,such as equipment and vehicles,are:

Accepted Answer

A) added to operating activities. 
B) subtracted from operating activities. 
C) added to investing activities. 
D) subtracted from investing activities. 
A) added to operating activities. 
B) subtracted from operating activities. 
C) added to investing activities. 
D) subtracted from investing activities.

Question 10

Changes in long-term liabilities belong in the financing section of a cash flow statement using the indirect method.

Accepted Answer

A) True 
 B)False

Question 11

The FASB recommends use of the direct method,rather than the indirect method,of preparing a cash flow statement.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is NOT a part of investing activities?

Accepted Answer

A) Buying a building 
B) Collecting on a loan receivable 
C) Borrowing money 
D) Selling off equipment 
A) Buying a building 
B) Collecting on a loan receivable 
C) Borrowing money 
D) Selling off equipment

Question 13

The three types of business activities on a Statement of Cash Flows are operating,investing,and management activities.

Accepted Answer

A) True 
 B)False

Question 14

On its Statement of Cash Flows,Mike's Motors reported cash flow from operating activities of $107,000,cash flow from investing activities of $88,000,and cash flow from financing activities of ($62,000).Mike's Motors invested $54,000 cash in long-term assets.Mike's Motors' free cash flow is:

Accepted Answer

A) $34,000. 
B) $8,000. 
C) $53,000. 
D) $79,000. 
A) $34,000. 
B) $8,000. 
C) $53,000. 
D) $79,000.

Question 15

The Balance Sheet reports the ending cash,but does not include cash equivalents.

Accepted Answer

A) True 
 B)False

Question 16

Under the direct method,gains and losses on the sale of a fixed asset are reported in the investing section of the cash flow statement.

Accepted Answer

A) True 
 B)False

Question 17

Which would NOT be subtracted from net income in the operating section of an indirect cash flow statement?

Accepted Answer

A) An increase in prepaid expenses 
B) An increase in Accounts Payable 
C) A decrease in Accounts Payable 
D) An increase in notes receivable 
A) An increase in prepaid expenses 
B) An increase in Accounts Payable 
C) A decrease in Accounts Payable 
D) An increase in notes receivable

Question 18

A Statement of Cash Flows shows the company's sources of cash,but does not detail how the cash was used by the company.

Accepted Answer

A) True 
 B)False

Question 19

Aspen Corp.sold an asset with a book value of $56,000 for $35,000 cash.Which of the following is a TRUE statement?

Accepted Answer

A) Loss on sale equals $35,000 and Cash inflow equals $35,000. 
B) Loss on sale equals $56,000 and Cash inflow equals $56,000. 
C) Loss on sale equals $21,000 and Cash inflow equals $35,000. 
D) Loss on sale equals $35,000 and Cash inflow equals $21,000. 
A) Loss on sale equals $35,000 and Cash inflow equals $35,000. 
B) Loss on sale equals $56,000 and Cash inflow equals $56,000. 
C) Loss on sale equals $21,000 and Cash inflow equals $35,000. 
D) Loss on sale equals $35,000 and Cash inflow equals $21,000.

Question 20

Which of the following activities is computed differently using the two methods of formatting a Statement of Cash Flows?

Accepted Answer

A) Operating activities 
B) Financing activities 
C) Investing activities 
D) Both operating activities and investing activities 
A) Operating activities 
B) Financing activities 
C) Investing activities 
D) Both operating activities and investing activities

Days -sales-in-inventory is calculated by dividing cost of goods sold by 365.

A Statement of Cash Flows would NOT disclose:

Some investing and financing activities involve no Cash Flows,so they:

Business transactions that do NOT involve the payment or receipt of cash are considered to be non-cash transactions.

Gains and losses on the sale of plant,property and equipment are ignored in the direct method of preparing a Statement of Cash Flows.

Operating expenses-other than depreciation-for the year were $280,000.Prepaid expenses increased by $16,000.Cash payments for operating expenses to be reported on the cash flow statement using the direct method would be:

The records of Eclectic Lighting showed a net loss of $30,000;depreciation expense of $25,000;and an increase in supplies on hand of $5,000.The amount of net cash flow from operating activities using the indirect method is:

Depreciation of factory equipment under the direct method would be reported as a(n):

Cash receipts from the sale of long-term assets,such as equipment and vehicles,are:

Changes in long-term liabilities belong in the financing section of a cash flow statement using the indirect method.

The FASB recommends use of the direct method,rather than the indirect method,of preparing a cash flow statement.

Which of the following is NOT a part of investing activities?

The three types of business activities on a Statement of Cash Flows are operating,investing,and management activities.

On its Statement of Cash Flows,Mike's Motors reported cash flow from operating activities of $107,000,cash flow from investing activities of $88,000,and cash flow from financing activities of ($62,000).Mike's Motors invested $54,000 cash in long-term assets.Mike's Motors' free cash flow is:

The Balance Sheet reports the ending cash,but does not include cash equivalents.

Under the direct method,gains and losses on the sale of a fixed asset are reported in the investing section of the cash flow statement.

Which would NOT be subtracted from net income in the operating section of an indirect cash flow statement?

A Statement of Cash Flows shows the company's sources of cash,but does not detail how the cash was used by the company.

Aspen Corp.sold an asset with a book value of $56,000 for $35,000 cash.Which of the following is a TRUE statement?

Which of the following activities is computed differently using the two methods of formatting a Statement of Cash Flows?

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, internal Control, audits, fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

Financial Statement Analysis

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Exam 11: The Statement of Cash Flows

Days -sales-in-inventory is calculated by dividing cost of goods sold by 365.

A Statement of Cash Flows would NOT disclose:

Some investing and financing activities involve no Cash Flows,so they:

Business transactions that do NOT involve the payment or receipt of cash are considered to be non-cash transactions.

Gains and losses on the sale of plant,property and equipment are ignored in the direct method of preparing a Statement of Cash Flows.

Operating expenses-other than depreciation-for the year were $280,000.Prepaid expenses increased by $16,000.Cash payments for operating expenses to be reported on the cash flow statement using the direct method would be:

The records of Eclectic Lighting showed a net loss of $30,000;depreciation expense of $25,000;and an increase in supplies on hand of $5,000.The amount of net cash flow from operating activities using the indirect method is:

Depreciation of factory equipment under the direct method would be reported as a(n):

Cash receipts from the sale of long-term assets,such as equipment and vehicles,are:

Changes in long-term liabilities belong in the financing section of a cash flow statement using the indirect method.

The FASB recommends use of the direct method,rather than the indirect method,of preparing a cash flow statement.

Which of the following is NOT a part of investing activities?

The three types of business activities on a Statement of Cash Flows are operating,investing,and management activities.

On its Statement of Cash Flows,Mike's Motors reported cash flow from operating activities of $107,000,cash flow from investing activities of $88,000,and cash flow from financing activities of ($62,000).Mike's Motors invested $54,000 cash in long-term assets.Mike's Motors' free cash flow is:

The Balance Sheet reports the ending cash,but does not include cash equivalents.

Under the direct method,gains and losses on the sale of a fixed asset are reported in the investing section of the cash flow statement.

Which would NOT be subtracted from net income in the operating section of an indirect cash flow statement?

A Statement of Cash Flows shows the company's sources of cash,but does not detail how the cash was used by the company.

Aspen Corp.sold an asset with a book value of $56,000 for $35,000 cash.Which of the following is a TRUE statement?

Which of the following activities is computed differently using the two methods of formatting a Statement of Cash Flows?

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, internal Control, audits, fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

Financial Statement Analysis

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