Question 1

Cash flows to assets is measured in "times."

Accepted Answer

A) True 
 B)False

Question 2

Bamberg Corporation acquired a long-term investment by issuance of long-term debt.Indicate which section,if any,this transaction would appear in,or relate to,on a statement of cash flows.

Accepted Answer

A)  Investing activities section 
B)  Operating activities section 
C)  Schedule of noncash investing and financing transactions 
D)  Financing activities section 
A)  Investing activities section 
B)  Operating activities section 
C)  Schedule of noncash investing and financing transactions 
D)  Financing activities section

Question 3

A decrease in plant assets shown in the investing activities section of the statement of cash flows would be presented based on the amount of the resulting gain or loss incurred.

Accepted Answer

A) True 
 B)False

Question 4

Royer Corporation engaged in this transaction:
 Issued common stock for cash.
Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

Accepted Answer

A)  Operating activities section 
B)  Does not represent a cash flow 
C)  Investing activities section 
D)  Financing activities section 
A)  Operating activities section 
B)  Does not represent a cash flow 
C)  Investing activities section 
D)  Financing activities section

Question 5

Royer Corporation engaged in this transaction:
 Collected accounts receivable.
Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

Accepted Answer

A)  Does not represent a cash flow 
B)  Operating activities section 
C)  Financing activities section 
D)  Investing activities section 
A)  Does not represent a cash flow 
B)  Operating activities section 
C)  Financing activities section 
D)  Investing activities section

Question 6

The purchase of trading securities with cash is considered an investing activity.

Accepted Answer

A) True 
 B)False

Question 7

Bamberg Corporation purchased a 60-day commercial paper.Indicate which section,if any,this transaction would appear in,or relate to,on a statement of cash flows.

Accepted Answer

A)  Does not appear on cash flow statement 
B)  Operating activities section 
C)  Financing activities section 
D)  Investing activities section 
A)  Does not appear on cash flow statement 
B)  Operating activities section 
C)  Financing activities section 
D)  Investing activities section

Question 8

Management would not use the statement of cash flows to

Accepted Answer

A)  assess the liquidity of the business. 
B)  manage cash flows. 
C)  pay its liabilities,dividends,and interest. 
D)  determine the financial position of the company. 
A)  assess the liquidity of the business. 
B)  manage cash flows. 
C)  pay its liabilities,dividends,and interest. 
D)  determine the financial position of the company.

Question 9

Assume that the balance of accounts payable does not change during a period.When preparing a statement of cash flows,an increase in ending inventory over beginning inventory will result in an adjustment to net income under the indirect approach because

Accepted Answer

A)  the amount of cost of goods sold is equal to the amount of cash paid for purchases. 
B)  consumed inventory is an expense but not a use of funds. 
C)  the amount of cost of goods sold on an accrual basis is less than the amount of cash paid for purchases of inventory. 
D)  the amount of cash paid for purchases of inventory is less than the amount of cost of goods sold on an accrual basis. 
A)  the amount of cost of goods sold is equal to the amount of cash paid for purchases. 
B)  consumed inventory is an expense but not a use of funds. 
C)  the amount of cost of goods sold on an accrual basis is less than the amount of cash paid for purchases of inventory. 
D)  the amount of cash paid for purchases of inventory is less than the amount of cost of goods sold on an accrual basis.

Question 10

Bamberg Corporation paid employee wages.Indicate which section,if any,this transaction would appear in,or relate to,on a statement of cash flows.

Accepted Answer

A)  Financing activities section 
B)  Investing activities section 
C)  Does not represent a cash flow 
D)  Operating activities section 
A)  Financing activities section 
B)  Investing activities section 
C)  Does not represent a cash flow 
D)  Operating activities section

Question 11

Royer Corporation engaged in this transaction:
 Paid interest on note.
Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

Accepted Answer

A)  Financing activities section 
B)  Schedule of noncash investing and financing transactions 
C)  Investing activities section 
D)  Operating activities section 
A)  Financing activities section 
B)  Schedule of noncash investing and financing transactions 
C)  Investing activities section 
D)  Operating activities section

Question 12

If the indirect method is used,which of the following would be subtracted from net income to arrive at net cash flows from operating activities?

Accepted Answer

A)  Increase in Notes Payable 
B)  Decrease in Inventory 
C)  Decrease in Accounts Payable 
D)  Depreciation Expense 
A)  Increase in Notes Payable 
B)  Decrease in Inventory 
C)  Decrease in Accounts Payable 
D)  Depreciation Expense

Question 13

Cash flows to assets is measured in terms of

Accepted Answer

A)  a percentage. 
B)  times. 
C)  days. 
D)  dollars. 
A)  a percentage. 
B)  times. 
C)  days. 
D)  dollars.

Question 14

Royer Corporation engaged in this transaction:
 Purchased inventory with cash.
Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

Accepted Answer

A)  Does not represent a cash flow 
B)  Investing activities section 
C)  Operating activities section 
D)  Financing activities section 
A)  Does not represent a cash flow 
B)  Investing activities section 
C)  Operating activities section 
D)  Financing activities section

Question 15

Match each definition with the correct term below.
-Financing activities

Accepted Answer

A) The method of preparing the operating section of the statement of cash flows that adjusts each item on the income statement from the accrual basis to the cash basis. 
B) The amount of cash that remains after deducting the funds a company must commit to continue operating at its planned level. 
C) Activities of a business that involve obtaining resources from stockholders and creditors,providing stockholders with a return on their investments,and repaying the amounts borrowed from creditors. 
D) Investments that can be quickly converted into cash. 
E) Activities of a business that involve the purchase and sale of property,plant,and equipment and other long-term assets.
F)The ratio of net cash flow from operating activities to average total assets.
G)Activities of a business that involve the cash inflows and outflows that enter into the determination of net income.
H)The ratio of net cash flow from operating activities to net income.
I)The method of preparing the operating section of the statement of cash flows that does not require the adjustment of each item on the income statement.
J)The ratio of net cash flow from operating activities to net sales. 
A) The method of preparing the operating section of the statement of cash flows that adjusts each item on the income statement from the accrual basis to the cash basis. 
B) The amount of cash that remains after deducting the funds a company must commit to continue operating at its planned level. 
C) Activities of a business that involve obtaining resources from stockholders and creditors,providing stockholders with a return on their investments,and repaying the amounts borrowed from creditors. 
D) Investments that can be quickly converted into cash. 
E) Activities of a business that involve the purchase and sale of property,plant,and equipment and other long-term assets.
F)The ratio of net cash flow from operating activities to average total assets.
G)Activities of a business that involve the cash inflows and outflows that enter into the determination of net income.
H)The ratio of net cash flow from operating activities to net income.
I)The method of preparing the operating section of the statement of cash flows that does not require the adjustment of each item on the income statement.
J)The ratio of net cash flow from operating activities to net sales.

Question 16

Match each definition with the correct term below.
-Cash flows to sales

Accepted Answer

A) The method of preparing the operating section of the statement of cash flows that adjusts each item on the income statement from the accrual basis to the cash basis. 
B) The amount of cash that remains after deducting the funds a company must commit to continue operating at its planned level. 
C) Activities of a business that involve obtaining resources from stockholders and creditors,providing stockholders with a return on their investments,and repaying the amounts borrowed from creditors. 
D) Investments that can be quickly converted into cash. 
E) Activities of a business that involve the purchase and sale of property,plant,and equipment and other long-term assets.
F)The ratio of net cash flow from operating activities to average total assets.
G)Activities of a business that involve the cash inflows and outflows that enter into the determination of net income.
H)The ratio of net cash flow from operating activities to net income.
I)The method of preparing the operating section of the statement of cash flows that does not require the adjustment of each item on the income statement.
J)The ratio of net cash flow from operating activities to net sales. 
A) The method of preparing the operating section of the statement of cash flows that adjusts each item on the income statement from the accrual basis to the cash basis. 
B) The amount of cash that remains after deducting the funds a company must commit to continue operating at its planned level. 
C) Activities of a business that involve obtaining resources from stockholders and creditors,providing stockholders with a return on their investments,and repaying the amounts borrowed from creditors. 
D) Investments that can be quickly converted into cash. 
E) Activities of a business that involve the purchase and sale of property,plant,and equipment and other long-term assets.
F)The ratio of net cash flow from operating activities to average total assets.
G)Activities of a business that involve the cash inflows and outflows that enter into the determination of net income.
H)The ratio of net cash flow from operating activities to net income.
I)The method of preparing the operating section of the statement of cash flows that does not require the adjustment of each item on the income statement.
J)The ratio of net cash flow from operating activities to net sales.

Question 17

Heckart Corporation purchased plant assets for $120,000 cash.The journal entry to record the outflow of cash is:

Accepted Answer

A)  Investments 120,000
Cash 120,000 
B)  Plant Assets 120,000
Cash 120,000 
C)  Plant Assets 120,000
Purchases 120,000 
D)  Purchases 120,000
Plant Assets 120,000 
A)  Investments 120,000
Cash 120,000 
B)  Plant Assets 120,000
Cash 120,000 
C)  Plant Assets 120,000
Purchases 120,000 
D)  Purchases 120,000
Plant Assets 120,000

Question 18

Noncash investing and financing transactions,such as the exchange of a long-term asset for a long-term liability,represent significant investing and financing activities and are not reflected in the financial statements.

Accepted Answer

A) True 
 B)False

Question 19

A company sells equipment with a carrying value of $10,000 for $7,000.Where,and for what amounts,would this transaction appear on a statement of cash flows using the indirect method?

Accepted Answer

First,the loss on sale of $3,000 would b

Question 20

Free cash flow is measured in terms of a dollar amount.

Accepted Answer

A) True 
 B)False

Cash flows to assets is measured in "times."

Bamberg Corporation acquired a long-term investment by issuance of long-term debt.Indicate which section,if any,this transaction would appear in,or relate to,on a statement of cash flows.

A decrease in plant assets shown in the investing activities section of the statement of cash flows would be presented based on the amount of the resulting gain or loss incurred.

Royer Corporation engaged in this transaction: Issued common stock for cash. Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

Royer Corporation engaged in this transaction: Collected accounts receivable. Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

The purchase of trading securities with cash is considered an investing activity.

Bamberg Corporation purchased a 60-day commercial paper.Indicate which section,if any,this transaction would appear in,or relate to,on a statement of cash flows.

Management would not use the statement of cash flows to

Assume that the balance of accounts payable does not change during a period.When preparing a statement of cash flows,an increase in ending inventory over beginning inventory will result in an adjustment to net income under the indirect approach because

Bamberg Corporation paid employee wages.Indicate which section,if any,this transaction would appear in,or relate to,on a statement of cash flows.

Royer Corporation engaged in this transaction: Paid interest on note. Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

If the indirect method is used,which of the following would be subtracted from net income to arrive at net cash flows from operating activities?

Cash flows to assets is measured in terms of

Royer Corporation engaged in this transaction: Purchased inventory with cash. Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

Match each definition with the correct term below. -Financing activities

Match each definition with the correct term below. -Cash flows to sales

Heckart Corporation purchased plant assets for $120,000 cash.The journal entry to record the outflow of cash is:

Noncash investing and financing transactions,such as the exchange of a long-term asset for a long-term liability,represent significant investing and financing activities and are not reflected in the financial statements.

A company sells equipment with a carrying value of $10,000 for $7,000.Where,and for what amounts,would this transaction appear on a statement of cash flows using the indirect method?

Free cash flow is measured in terms of a dollar amount.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

Financial Performance Measurement

Investments

Filters

Exam 13: The Statement of Cash Flows

Cash flows to assets is measured in "times."

Bamberg Corporation acquired a long-term investment by issuance of long-term debt.Indicate which section,if any,this transaction would appear in,or relate to,on a statement of cash flows.

A decrease in plant assets shown in the investing activities section of the statement of cash flows would be presented based on the amount of the resulting gain or loss incurred.

Royer Corporation engaged in this transaction: Issued common stock for cash. Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

Royer Corporation engaged in this transaction: Collected accounts receivable. Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

The purchase of trading securities with cash is considered an investing activity.

Bamberg Corporation purchased a 60-day commercial paper.Indicate which section,if any,this transaction would appear in,or relate to,on a statement of cash flows.

Management would not use the statement of cash flows to

Assume that the balance of accounts payable does not change during a period.When preparing a statement of cash flows,an increase in ending inventory over beginning inventory will result in an adjustment to net income under the indirect approach because

Bamberg Corporation paid employee wages.Indicate which section,if any,this transaction would appear in,or relate to,on a statement of cash flows.

Royer Corporation engaged in this transaction: Paid interest on note. Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

If the indirect method is used,which of the following would be subtracted from net income to arrive at net cash flows from operating activities?

Cash flows to assets is measured in terms of

Royer Corporation engaged in this transaction: Purchased inventory with cash. Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

Match each definition with the correct term below. -Financing activities

Match each definition with the correct term below. -Cash flows to sales

Heckart Corporation purchased plant assets for $120,000 cash.The journal entry to record the outflow of cash is:

Noncash investing and financing transactions,such as the exchange of a long-term asset for a long-term liability,represent significant investing and financing activities and are not reflected in the financial statements.

A company sells equipment with a carrying value of $10,000 for $7,000.Where,and for what amounts,would this transaction appear on a statement of cash flows using the indirect method?

Free cash flow is measured in terms of a dollar amount.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

Financial Performance Measurement

Investments

Filters