Question 1

Which of the following statements is true about information in a statement of cash flows?

Accepted Answer

A) The statement of cash flows is one of the required financial statements for publicly-held companies. 
B) The statement of cash flows is prepared at the option of management. 
C) The statement of cash flows is combined with the income statement. 
D) The statement of cash flows is not completed when an income statement is prepared. 
A) The statement of cash flows is one of the required financial statements for publicly-held companies. 
B) The statement of cash flows is prepared at the option of management. 
C) The statement of cash flows is combined with the income statement. 
D) The statement of cash flows is not completed when an income statement is prepared.

Question 2

Which of the following items would be reported in the financing activities section on the statement of cash flows?

Accepted Answer

A) Cash paid for rent 
B) Cash received from sale of inventory 
C) Cash received from issuance of long-term debt 
D) Cash paid for land 
A) Cash paid for rent 
B) Cash received from sale of inventory 
C) Cash received from issuance of long-term debt 
D) Cash paid for land

Question 3

If a company uses the indirect method to prepare the statement of cash flows,how would the adjustment to reflect the amount of cash payments to employees be presented on the statement of cash flows?

Accepted Answer

A) The adjustment will be for the increase or decrease in accounts payable during the period and will adjust net income in the operating activities section in the statement of cash flows. 
B) The adjustment will be for the increase or decrease in accounts receivable during the period and will adjust net income in the operating activities section in the statement of cash flows. 
C) The adjustment will be for the increase or decrease in inventory during the period and will adjust net income in the operating activities section in the statement of cash flows. 
D) The adjustment will be for the increase or decrease in wages payable during the period and will adjust net income in the operating activities section in the statement of cash flows. 
A) The adjustment will be for the increase or decrease in accounts payable during the period and will adjust net income in the operating activities section in the statement of cash flows. 
B) The adjustment will be for the increase or decrease in accounts receivable during the period and will adjust net income in the operating activities section in the statement of cash flows. 
C) The adjustment will be for the increase or decrease in inventory during the period and will adjust net income in the operating activities section in the statement of cash flows. 
D) The adjustment will be for the increase or decrease in wages payable during the period and will adjust net income in the operating activities section in the statement of cash flows.

Question 4

A company sells equipment at a loss.If the company prepares the statement of cash flows using the indirect method or the direct method,where would this transaction appear?

Accepted Answer

A) The sale of equipment at a loss would be presented in the investing activities section as a cash payment under both methods. 
B) The sale of equipment at a loss would be presented in the investing activities section as a cash receipt under both methods. 
C) The sale of equipment at a loss would be presented in the operating activities section as a reduction in net income under the indirect method and as a cash receipt under the direct method. 
D) The sale of equipment at a loss would be presented in the financing activities section as a cash receipt under both methods. 
A) The sale of equipment at a loss would be presented in the investing activities section as a cash payment under both methods. 
B) The sale of equipment at a loss would be presented in the investing activities section as a cash receipt under both methods. 
C) The sale of equipment at a loss would be presented in the operating activities section as a reduction in net income under the indirect method and as a cash receipt under the direct method. 
D) The sale of equipment at a loss would be presented in the financing activities section as a cash receipt under both methods.

Question 5

Where are noncash investing and financing activities reported?

Accepted Answer

A) The financing activities section of the statement of cash flows 
B) A schedule accompanying the statement of cash flows 
C) The investing activities section of the statement of cash flows 
D) In both A and B 
A) The financing activities section of the statement of cash flows 
B) A schedule accompanying the statement of cash flows 
C) The investing activities section of the statement of cash flows 
D) In both A and B

Question 6

A company's income statement reports $30,000 depreciation expenses during the period.Using the direct method to prepare the statement of cash flows,how would the depreciation expense be reported on the statement of cash flows?

Accepted Answer

A) Depreciation expense would be an addition under investing activities. 
B) Depreciation expense would be an addition under financing activities. 
C) Depreciation expense would be a deduction under operating activities. 
D) Depreciation expense would not be reported on the statement of cash flows. 
A) Depreciation expense would be an addition under investing activities. 
B) Depreciation expense would be an addition under financing activities. 
C) Depreciation expense would be a deduction under operating activities. 
D) Depreciation expense would not be reported on the statement of cash flows.

Question 7

Which of the following statements is true about the information in a statement of cash flows?

Accepted Answer

A) The statement of cash flows contains information about stock splits and stock dividends distributed by the company. 
B) The statement of cash flows contains information about the business's ability to generate positive cash flows in future periods. 
C) The statement of cash flows contains information about the business's percentage change in each item of revenue and expense. 
D) The statement of cash flows contains information about the differences between net income and additions to retained earnings. 
A) The statement of cash flows contains information about stock splits and stock dividends distributed by the company. 
B) The statement of cash flows contains information about the business's ability to generate positive cash flows in future periods. 
C) The statement of cash flows contains information about the business's percentage change in each item of revenue and expense. 
D) The statement of cash flows contains information about the differences between net income and additions to retained earnings.

Question 8

Under the direct method of cash flow,which of the following is not included in the statement of cash flows?

Accepted Answer

A) Changes in accounts receivable 
B) Changes in accounts payable 
C) Changes in inventories 
D) Changes in amortization 
A) Changes in accounts receivable 
B) Changes in accounts payable 
C) Changes in inventories 
D) Changes in amortization

Question 9

An outflow of cash from an investing activity would be

Accepted Answer

A) making loans to third parties. 
B) issuing notes payable. 
C) paying cash dividends to stockholders. 
D) purchasing treasury stock. 
A) making loans to third parties. 
B) issuing notes payable. 
C) paying cash dividends to stockholders. 
D) purchasing treasury stock.

Question 10

Paying cash dividends would be

Accepted Answer

A) a cash outflow from operations. 
B) a cash outflow from financing. 
C) a cash outflow from investing. 
D) none of the above. 
A) a cash outflow from operations. 
B) a cash outflow from financing. 
C) a cash outflow from investing. 
D) none of the above.

Question 11

Smithson Corporation had the following selected balance sheet changes for the past year:
 
The company's operating income during the year was $35,000.What is the net cash provided by operating activities during last year on the statement of cash flows for Smithson Corporation (using the indirect method)?

Accepted Answer

A) $25,000 
B) $45,000 
C) $92,000 
D) $10,000 
A) $25,000 
B) $45,000 
C) $92,000 
D) $10,000

Question 12

When a company uses the indirect method to present the statement of cash flows,a gain on the sale of a long-term asset must be added to net income to reconcile to net cash provided by operating activities.

Accepted Answer

A) True 
 B)False

Question 13

A company uses the indirect method to prepare the statement of cash flows.How would a gain from the sale of equipment be presented on the statement?

Accepted Answer

A) A gain from the sale of equipment would be an addition in the investing activities section. 
B) A gain from the sale of equipment would be added to net income in the operating activities section. 
C) A gain from the sale of equipment would be a deduction in the financing activities section. 
D) A gain from the sale of equipment would be deducted from net income in the operating activities section. 
A) A gain from the sale of equipment would be an addition in the investing activities section. 
B) A gain from the sale of equipment would be added to net income in the operating activities section. 
C) A gain from the sale of equipment would be a deduction in the financing activities section. 
D) A gain from the sale of equipment would be deducted from net income in the operating activities section.

Question 14

The statement of cash flows shows not only the amount of cash used during a particular time,but also how the cash was used.

Accepted Answer

A) True 
 B)False

Question 15

The following data relate to Sorrentino Corporation for last year:
 
What is the net cash provided by operating activities for last year on the statement of cash flows for Sorrentino Corporation?

Accepted Answer

A) $130,000 
B) $142,000 
C) $173,000 
D) $177,000 
A) $130,000 
B) $142,000 
C) $173,000 
D) $177,000

Question 16

The income statement and a partial balance sheet for Jetson Company is presented below.Prepare the operating activities section of the statement of cash flows using the direct method.

Accepted Answer

The answer of The income statement and a partial balance...

Question 17

The income statement and a partial balance sheet for Regovich Company is presented below.Prepare the operating activities section of the statement of cash flows using the indirect method.

Accepted Answer

The answer of The income statement and a partial balance...

Question 18

The managerial accountant at the Holiday Musical Academy is required to complete the statement of cash flows.The managerial accountant is required to determine the amount of money the company used to purchase property,plant,and equipment (PP&E)during the year.The balance of PP&E at the beginning of the year is $1,850,000 and the balance of PP&E at the end of the year is $2,950,000.The managerial accountant reviewed the general journal and noticed that the original cost of equipment sold during the year was $20,000.
Using the following information,calculate the amount of cash the company paid in cash to purchase new property,plant,and equipment during the year:

Accepted Answer

A) $20,000 
B) $1,850,000 
C) $1,120,250 
D) $2,950,250 
A) $20,000 
B) $1,850,000 
C) $1,120,250 
D) $2,950,250

Question 19

Operating activities on the statement of cash flows include activities that affect net income,current liabilities and current assets.

Accepted Answer

A) True 
 B)False

Question 20

Computing cash generated from operating activities is

Accepted Answer

A) the same for both the direct and indirect methods. 
B) different because the indirect method considers depreciation. 
C) different in that the direct method considers depreciation. 
D) none of the above. 
A) the same for both the direct and indirect methods. 
B) different because the indirect method considers depreciation. 
C) different in that the direct method considers depreciation. 
D) none of the above.

Which of the following statements is true about information in a statement of cash flows?

Which of the following items would be reported in the financing activities section on the statement of cash flows?

If a company uses the indirect method to prepare the statement of cash flows,how would the adjustment to reflect the amount of cash payments to employees be presented on the statement of cash flows?

A company sells equipment at a loss.If the company prepares the statement of cash flows using the indirect method or the direct method,where would this transaction appear?

Where are noncash investing and financing activities reported?

A company's income statement reports $30,000 depreciation expenses during the period.Using the direct method to prepare the statement of cash flows,how would the depreciation expense be reported on the statement of cash flows?

Which of the following statements is true about the information in a statement of cash flows?

Under the direct method of cash flow,which of the following is not included in the statement of cash flows?

An outflow of cash from an investing activity would be

Paying cash dividends would be

When a company uses the indirect method to present the statement of cash flows,a gain on the sale of a long-term asset must be added to net income to reconcile to net cash provided by operating activities.

A company uses the indirect method to prepare the statement of cash flows.How would a gain from the sale of equipment be presented on the statement?

The statement of cash flows shows not only the amount of cash used during a particular time,but also how the cash was used.

The following data relate to Sorrentino Corporation for last year: What is the net cash provided by operating activities for last year on the statement of cash flows for Sorrentino Corporation?

The income statement and a partial balance sheet for Jetson Company is presented below.Prepare the operating activities section of the statement of cash flows using the direct method.

The income statement and a partial balance sheet for Regovich Company is presented below.Prepare the operating activities section of the statement of cash flows using the indirect method.

Operating activities on the statement of cash flows include activities that affect net income,current liabilities and current assets.

Computing cash generated from operating activities is

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Financial Statement Analysis

Sustainability

Filters

Exam 13: Statement of Cash Flows

Which of the following statements is true about information in a statement of cash flows?

Which of the following items would be reported in the financing activities section on the statement of cash flows?

If a company uses the indirect method to prepare the statement of cash flows,how would the adjustment to reflect the amount of cash payments to employees be presented on the statement of cash flows?

A company sells equipment at a loss.If the company prepares the statement of cash flows using the indirect method or the direct method,where would this transaction appear?

Where are noncash investing and financing activities reported?

A company's income statement reports $30,000 depreciation expenses during the period.Using the direct method to prepare the statement of cash flows,how would the depreciation expense be reported on the statement of cash flows?

Which of the following statements is true about the information in a statement of cash flows?

Under the direct method of cash flow,which of the following is not included in the statement of cash flows?

An outflow of cash from an investing activity would be

Paying cash dividends would be

When a company uses the indirect method to present the statement of cash flows,a gain on the sale of a long-term asset must be added to net income to reconcile to net cash provided by operating activities.

A company uses the indirect method to prepare the statement of cash flows.How would a gain from the sale of equipment be presented on the statement?

The statement of cash flows shows not only the amount of cash used during a particular time,but also how the cash was used.

The following data relate to Sorrentino Corporation for last year: What is the net cash provided by operating activities for last year on the statement of cash flows for Sorrentino Corporation?

The income statement and a partial balance sheet for Jetson Company is presented below.Prepare the operating activities section of the statement of cash flows using the direct method.

The income statement and a partial balance sheet for Regovich Company is presented below.Prepare the operating activities section of the statement of cash flows using the indirect method.

Operating activities on the statement of cash flows include activities that affect net income,current liabilities and current assets.

Computing cash generated from operating activities is

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Financial Statement Analysis

Sustainability

Filters