Question 1

For each of the following operating activities, select whether it is a source of cash, a use of cash, neither under the indirect method.
-converting bonds to stock

Accepted Answer

A) source 
B) use 
C) neither 
A) source 
B) use 
C) neither

Question 2

An increase in accounts payable is:

Accepted Answer

A) added to the cash flows from investing activities. 
B) subtracted from the net income when determining the net cash provided by operating activities. 
C) added to the net income when determining the net cash provided by operating activities. 
D) not used to calculate the net cash provided by operating activities. 
A) added to the cash flows from investing activities. 
B) subtracted from the net income when determining the net cash provided by operating activities. 
C) added to the net income when determining the net cash provided by operating activities. 
D) not used to calculate the net cash provided by operating activities.

Question 3

A list of sources and uses of cash are given below. Select on the line provided whether each is an operating, investing, or financing activity.
-repayment of bond indebtedness

Accepted Answer

A) operating 
B) investing 
C) financing activity. 
A) operating 
B) investing 
C) financing activity.

Question 4

For each of the following operating activities, indicate whether it is a source of cash, a use of cash, neither under the indirect method.
-----(a) decrease in Accounts Receivable
-----(b) increase in Wages Payable
-----(c) decrease in Taxes Payable
-----(d) depreciation expense
-----(e) loss on early redemption of bonds
-----(f) converting bonds to stock

Accepted Answer

(a) source, (b) sour

Question 5

The FASB requires companies to report the Statement of Cash Flows using the direct method.

Accepted Answer

A) True 
 B)False

Question 6

Chattel Company sold equipment that originally cost $46,000 and accumulated depreciation in the amount of $38,200 for $8,000 cash.
- What amount is reported in the Cash Flows from Investing Activities section of the Statement of Cash Flows for the sale of this equipment?

Accepted Answer

A) $7,800 
B) $200 
C) $8,000 
D) $0 
A) $7,800 
B) $200 
C) $8,000 
D) $0

Question 7

Noncash investing and financing activities, such as the issuance of bonds to acquire business property, do not require disclosure as the cash account is not affected.

Accepted Answer

A) True 
 B)False

Question 8

A list of sources and uses of cash are given below. Select on the line provided whether each is an operating, investing, or financing activity.
-resale of Treasury Stock

Accepted Answer

A) operating 
B) investing 
C) financing activity. 
A) operating 
B) investing 
C) financing activity.

Question 9

When the net income is reconciled with the net cash provided by operating activities, depreciation expense is added to the net income.

Accepted Answer

A) True 
 B)False

Question 10

On a statement of cash flows, an increase in a prepaid expense:

Accepted Answer

A) is included in computing cash flows from operating activities. 
B) is included in computing cash flows from investing activities. 
C) is included in computing cash flows from financing activities. 
D) is not used in computing cash flows. 
A) is included in computing cash flows from operating activities. 
B) is included in computing cash flows from investing activities. 
C) is included in computing cash flows from financing activities. 
D) is not used in computing cash flows.

Question 11

The retirement of bonds for cash is reported under which of the following sections of the statement of cash flows?

Accepted Answer

A) Financing Activities 
B) Operating Activities 
C) Investing Activities 
D) Disclosures 
A) Financing Activities 
B) Operating Activities 
C) Investing Activities 
D) Disclosures

Question 12

When calculating the net cash provided by operating activities, a gain on the sale of equipment should:

Accepted Answer

A) not be used in the calculation. 
B) be added to the net income. 
C) be subtracted from the net income. 
D) be reported in the cash flows from financing activities section. 
A) not be used in the calculation. 
B) be added to the net income. 
C) be subtracted from the net income. 
D) be reported in the cash flows from financing activities section.

Question 13

Operating activities include:

Accepted Answer

A) changes in accounts receivable. 
B) purchases of plant and equipment for cash. 
C) issuance of common stock. 
D) payment of dividends to shareholders. 
A) changes in accounts receivable. 
B) purchases of plant and equipment for cash. 
C) issuance of common stock. 
D) payment of dividends to shareholders.

Question 14

The Natural Company's cash balance at December 31, 2019, was $150,000. The following information was reported on the company's statement of cash flows for 2020:
  
-
 
The Natural Company's balance sheet would report the balance of Cash on December 31, 2020.

Accepted Answer

A) $150,000 
B) ($16,000) 
C) $134,000 
D) $192,000 
A) $150,000 
B) ($16,000) 
C) $134,000 
D) $192,000

Question 15

On the statement of cash flows, a $5,000 gain on the sale of investments would be:

Accepted Answer

A) a decrease in the Investing section. 
B) an increase in the Financing section. 
C) a decrease in the Operating section. 
D) an increase in the Investing section. 
A) a decrease in the Investing section. 
B) an increase in the Financing section. 
C) a decrease in the Operating section. 
D) an increase in the Investing section.

Question 16

A gain on the sale of equipment is reported in the -------------section of the statement of cash flows.

Accepted Answer

operating

Question 17

For each of the following operating activities, select whether it is a source of cash, a use of cash or neither under the indirect method.
-increase in Accounts Payable

Accepted Answer

A) source 
B) use 
C) neither 
A) source 
B) use 
C) neither

Question 18

There is usually a difference between the net income reported on the income statement and the net cash from operating activities shown on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 19

Financing activities include all of the following except:

Accepted Answer

A) purchases of plant and equipment for cash. 
B) payment of dividends to shareholders. 
C) receipt of cash upon the issuance of bonds. 
D) repurchase of company stock. 
A) purchases of plant and equipment for cash. 
B) payment of dividends to shareholders. 
C) receipt of cash upon the issuance of bonds. 
D) repurchase of company stock.

Question 20

The statement of cash flows provides information about cash flows from operating activities, investing activities, and financing activities.

Accepted Answer

A) True 
 B)False

Exam 24: The Statement of Cash Flows

For each of the following operating activities, select whether it is a source of cash, a use of cash, neither under the indirect method. -converting bonds to stock

An increase in accounts payable is:

A list of sources and uses of cash are given below. Select on the line provided whether each is an operating, investing, or financing activity. -repayment of bond indebtedness

The FASB requires companies to report the Statement of Cash Flows using the direct method.

Chattel Company sold equipment that originally cost $46,000 and accumulated depreciation in the amount of $38,200 for $8,000 cash. - What amount is reported in the Cash Flows from Investing Activities section of the Statement of Cash Flows for the sale of this equipment?

Noncash investing and financing activities, such as the issuance of bonds to acquire business property, do not require disclosure as the cash account is not affected.

A list of sources and uses of cash are given below. Select on the line provided whether each is an operating, investing, or financing activity. -resale of Treasury Stock

When the net income is reconciled with the net cash provided by operating activities, depreciation expense is added to the net income.

On a statement of cash flows, an increase in a prepaid expense:

The retirement of bonds for cash is reported under which of the following sections of the statement of cash flows?

When calculating the net cash provided by operating activities, a gain on the sale of equipment should:

Operating activities include:

The Natural Company's cash balance at December 31, 2019, was $150,000. The following information was reported on the company's statement of cash flows for 2020: - The Natural Company's balance sheet would report the balance of Cash on December 31, 2020.

On the statement of cash flows, a $5,000 gain on the sale of investments would be:

A gain on the sale of equipment is reported in the -------------section of the statement of cash flows.

For each of the following operating activities, select whether it is a source of cash, a use of cash or neither under the indirect method. -increase in Accounts Payable

There is usually a difference between the net income reported on the income statement and the net cash from operating activities shown on the statement of cash flows.

Financing activities include all of the following except:

The statement of cash flows provides information about cash flows from operating activities, investing activities, and financing activities.

Accounting: The Language of Business

Analyzing Business Transactions

Analyzing Business Transactions Using T Accounts

The General Journal and the General Ledger

Adjustments and the Worksheet

Closing Entries and Teh Postclosing Trial Balance

Accounting for Sales and Accounts Receivable

Accounting for Purchases and Accounts Payable

Cash Receipts, Cash Payments, and Banking Procedures

Payroll Computations, Records, and Payment

Payroll Taxes, Deposits, and Reports

Accruals, Deferrals, and the Worksheet

Financial Statements and Closing Procedures

Accounting Principles and Reporting Standards

Accounts Receivable and Uncollectible Accounts

Notes Payable and Notes Receivable

Merchandise Inventory

Property, Plant, and Equipment

Accounting for Partnerships

Corporations: Formation and Capital Stock Transactions

Corporate Earnings and Capital Transactions

Long-Term Bonds

Financial Statement Analysis

Departmentalized Profit and Cost Centers

Accounting for Manufacturing Activities

Job Order Cost Accounting

Process Cost Accounting

Controlling Manufacturing Costs: Standard Costs

Cost-Revenue Analysis for Decision Making

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