Question 1

The cash received from issuing common stock is not reported on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 2

Use the following information .
The Kerfuffle Company Income Statement
For the Year Ended June 30, 2019
   General and Administrative Expenses
       Liabilities and Stockholders' Equity
   Additional information:
Plant assets that originally cost $67,200 were sold for $56,400, resulting in a gain of $8,200. Dividends of $35,815 were declared and paid in 2019. There were no dividends declared in 2018.
-Using the information provided, prepare the cash flows from operating activities for The Kerfuffle Company using the indirect method.

Accepted Answer

Cash Flows

Question 3

If the income statement reports a net loss for the year, the loss is not reported in the operating activities section of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 4

Cannon Manufacturing Co. sold equipment that cost $18,000 for $5,000. A gain on sale of $1,000 was recorded. How is the Cash Flows from Investing Activities affected?

Accepted Answer

A) A cash inflow of $5,000 is recorded. 
B) A cash inflow of $6,000 is recorded. 
C) A cash inflow of $11,000 is recorded. 
D) A cash inflow of $12,000 is recorded. 
A) A cash inflow of $5,000 is recorded. 
B) A cash inflow of $6,000 is recorded. 
C) A cash inflow of $11,000 is recorded. 
D) A cash inflow of $12,000 is recorded.

Question 5

A list of sources and uses of cash are given below. Indicate on the line provided whether each is an (O)operating, (I)investing, (F)financing, or a significant (N)noncash financing and investing activity.
-declared dividend

Accepted Answer

A) (O)operating 
B) (I)investing 
C) (F)financing, or a significant 
D) (N)noncash financing and investing activity. 
A) (O)operating 
B) (I)investing 
C) (F)financing, or a significant 
D) (N)noncash financing and investing activity.

Question 6

The purchase of treasury stock is treated as a cash outflow in the------------ section of the statement of cash flows.

Accepted Answer

financing

Question 7

When a firm issues a long-term note payable, the amount that it receives for the note is considered a cash inflow from financing activities.

Accepted Answer

A) True 
 B)False

Question 8

On a statement of cash flows, depreciation expense is:

Accepted Answer

A) subtracted from net income in the computation of the net cash provided by operating activities. 
B) added to net income in the computation of the net cash provided by operating activities. 
C) treated as a cash outflow in the computation of the net cash used in investing activities. 
D) treated as a cash inflow in the computation of the net cash used in investing activities. 
A) subtracted from net income in the computation of the net cash provided by operating activities. 
B) added to net income in the computation of the net cash provided by operating activities. 
C) treated as a cash outflow in the computation of the net cash used in investing activities. 
D) treated as a cash inflow in the computation of the net cash used in investing activities.

Question 9

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 Prepaid Expense

Accepted Answer

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

Question 10

A decrease in current liabilities is:

Accepted Answer

A) a source of cash under operating activities. 
B) not reported on the statement of cash flows. 
C) a use of cash under operating activities. 
D) a use of cash under investing activities. 
A) a source of cash under operating activities. 
B) not reported on the statement of cash flows. 
C) a use of cash under operating activities. 
D) a use of cash under investing activities.

Question 11

Corporations do not commonly use the direct method for the Statement of Cash Flows because

Accepted Answer

A) of the many additional disclosures and schedules that must accompany the statement. 
B) the FASB prefers the indirect method. 
C) the direct method does not follow GAAP. 
D) there are fewer disclosures required under the indirect method. 
A) of the many additional disclosures and schedules that must accompany the statement. 
B) the FASB prefers the indirect method. 
C) the direct method does not follow GAAP. 
D) there are fewer disclosures required under the indirect method.

Question 12

Generally, if a short-term investment is to be classified as a cash equivalent,:

Accepted Answer

A) 1 month from the date it was acquired. 
B) 3 months from the date it was acquired. 
C) 6 months from the date it was acquired. 
D) 12 months from the date it was acquired. 
A) 1 month from the date it was acquired. 
B) 3 months from the date it was acquired. 
C) 6 months from the date it was acquired. 
D) 12 months from the date it was acquired.

Question 13

Anders Inc, reported that its bonds with a par value of $500,000 and a carrying value of $545,000 were retired for $525,000 resulting in a gain of $20,000. The amounts to be reported on the statement of cash flows include:

Accepted Answer

A) a $45,000 decrease in cash for financing activities 
B) a $525,000 decrease in cash for investing activities and a $45,000 increase in financing activities. 
C) a $20,000 decrease in cash from operating activities and a $525,000 decrease in cash for financing activities. 
D) $20,000 increase in cash from operating activities and a $545,000 decrease in cash used for financing activities. 
A) a $45,000 decrease in cash for financing activities 
B) a $525,000 decrease in cash for investing activities and a $45,000 increase in financing activities. 
C) a $20,000 decrease in cash from operating activities and a $525,000 decrease in cash for financing activities. 
D) $20,000 increase in cash from operating activities and a $545,000 decrease in cash used for financing activities.

Question 14

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 Receivable

Accepted Answer

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

Exam 24: The Statement of Cash Flows

The cash received from issuing common stock is not reported on the statement of cash flows.

If the income statement reports a net loss for the year, the loss is not reported in the operating activities section of the statement of cash flows.

Cannon Manufacturing Co. sold equipment that cost $18,000 for $5,000. A gain on sale of $1,000 was recorded. How is the Cash Flows from Investing Activities affected?

A list of sources and uses of cash are given below. Indicate on the line provided whether each is an (O)operating, (I)investing, (F)financing, or a significant (N)noncash financing and investing activity. -declared dividend

The purchase of treasury stock is treated as a cash outflow in the------------ section of the statement of cash flows.

When a firm issues a long-term note payable, the amount that it receives for the note is considered a cash inflow from financing activities.

On a statement of cash flows, depreciation expense is:

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 Prepaid Expense

A decrease in current liabilities is:

Corporations do not commonly use the direct method for the Statement of Cash Flows because

Generally, if a short-term investment is to be classified as a cash equivalent,:

Anders Inc, reported that its bonds with a par value of $500,000 and a carrying value of $545,000 were retired for $525,000 resulting in a gain of $20,000. The amounts to be reported on the statement of cash flows include:

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 Receivable

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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