Question 1

Which of the following is/are created by operating activities?

Accepted Answer

A) An increase in long-term debt 
B) An increase in common stock 
C) Revenues and expenses 
D) Both A and B 
A) An increase in long-term debt 
B) An increase in common stock 
C) Revenues and expenses 
D) Both A and B

Question 2

Which of the following is the primary source of cash over the life of a business?

Accepted Answer

A) Financing activities 
B) Operating activities 
C) Investing activities 
D) None of the above 
A) Financing activities 
B) Operating activities 
C) Investing activities 
D) None of the above

Question 3

The managerial accountant at the Clothing Factory is required to determine the amount of cash received from consumers during the year.The managerial accountant reported that the beginning balance in accounts receivable on January 1,20X2 was $600,000.There were $10,200,000 in sales revenue recorded on the income statement,and the ending balance in accounts receivable on December 31,20X2 was $420,000.Calculate the amount of cash collections at the Clothing Factory during 20X2 and discuss how the managerial accountant can ensure that all cash transactions from operating activities are recorded during the year.What occurs when accounts receivable increases? What occurs when accounts receivable decreases?

Accepted Answer

$10,380,000.To ensure the managerial acc

Question 4

Use the indirect method of preparing a statement of cash flows to answer the question.
Ending balances for Sunday Hut are listed below:
   
Net income for this year was $97,000 and dividends of $24,000 were declared and paid during this year.
What was the net cash provided by financing activities?

Accepted Answer

$64,400
Explanation:Calculatio

Question 5

In a company that uses the direct method to prepare the statement of cash flows,the amount of cash it pays to employees is computed as

Accepted Answer

A) salary expense plus the ending balance salaries payable. 
B) salary expense plus the decrease in salaries payable. 
C) salary expense plus the increase in salaries payable. 
D) salary expense plus the beginning balance in salaries payable. 
A) salary expense plus the ending balance salaries payable. 
B) salary expense plus the decrease in salaries payable. 
C) salary expense plus the increase in salaries payable. 
D) salary expense plus the beginning balance in salaries payable.

Question 6

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

Accepted Answer

A) $165,000 
B) $123,000 
C) $169,000 
D) $137,000 
A) $165,000 
B) $123,000 
C) $169,000 
D) $137,000

Question 7

Creditor and stockholder transactions are considered ________ activities.

Accepted Answer

A) financing 
B) planning 
C) operating 
D) investing 
A) financing 
B) planning 
C) operating 
D) investing

Question 8

If a company uses the indirect method to prepare the statement of cash flows,which of the following items would be subtracted from net income to determine the net cash flow from operating activities?

Accepted Answer

A) A loss on the sale of equipment would be subtracted from net income to determine the net cash flow from operating activities in the statement of cash flows. 
B) An increase in dividends payable would be subtracted from net income to determine the net cash flow from operating activities in the statement of cash flows. 
C) Amortization of a premium on bonds payable would be subtracted from net income to determine the net cash flow from operating activities in the statement of cash flows. 
D) Depreciation expense would be subtracted from net income to determine the net cash flow from operating activities in the statement of cash flows. 
A) A loss on the sale of equipment would be subtracted from net income to determine the net cash flow from operating activities in the statement of cash flows. 
B) An increase in dividends payable would be subtracted from net income to determine the net cash flow from operating activities in the statement of cash flows. 
C) Amortization of a premium on bonds payable would be subtracted from net income to determine the net cash flow from operating activities in the statement of cash flows. 
D) Depreciation expense would be subtracted from net income to determine the net cash flow from operating activities in the statement of cash flows.

Question 9

A company uses the direct method to prepare the statement of cash flows.It presents the following data on its financial statements:
 
*Relates solely to the acquisition of inventory
Which of the following is correct about salaries payable in the operating activities category of the cash flow statement?

Accepted Answer

A) The increase of $4,000 will be subtracted from salary expense to determine payments to employees. 
B) The increase of $4,000 will be subtracted from net income. 
C) The increase of $4,000 will be added to salary expense to determine payments to employees. 
D) The increase of $4,000 will be added to net income. 
A) The increase of $4,000 will be subtracted from salary expense to determine payments to employees. 
B) The increase of $4,000 will be subtracted from net income. 
C) The increase of $4,000 will be added to salary expense to determine payments to employees. 
D) The increase of $4,000 will be added to net income.

Question 10

A company uses the indirect method to prepare the statement of cash flows.In determining the net cash flow from operating activities,which of the following items would be added to net income?

Accepted Answer

A) An increase in dividends paid would be added to net income. 
B) An increase in accrued liabilities would be added to net income. 
C) A decrease in accounts payable would be added to net income. 
D) A gain on the sale of land would be added to net income. 
A) An increase in dividends paid would be added to net income. 
B) An increase in accrued liabilities would be added to net income. 
C) A decrease in accounts payable would be added to net income. 
D) A gain on the sale of land would be added to net income.

Question 11

The managerial accountant at the Organic Food Shoppe used the indirect method to prepare the Statement of Cash Flows and reported the following data:   
The managerial accountant is required to determine the amount of free cash flow at the company.Calculate the free cash flow at the company and list at least three ways the company can use the free cash flow at the business.

Accepted Answer

The amount of free cash flow at the Memo

Question 12

Which of the following would appear on a statement of cash flows prepared using the direct method?

Accepted Answer

A) Cash payments for salaries would appear on the statement. 
B) A loss of the sale of equipment would appear on the statement. 
C) Amortization expenses would appear on the statement. 
D) Depreciation expenses would appear on the statement. 
A) Cash payments for salaries would appear on the statement. 
B) A loss of the sale of equipment would appear on the statement. 
C) Amortization expenses would appear on the statement. 
D) Depreciation expenses would appear on the statement.

Question 13

Activities that are included in the operating activities section of the statement of cash flows include which of the following activities?

Accepted Answer

A) Activities that obtain the cash needed to launch and sustain the business 
B) Activities that increase or decrease long-term assets 
C) Activities that create revenue or expenses in the entity's major line of business 
D) None of the above 
A) Activities that obtain the cash needed to launch and sustain the business 
B) Activities that increase or decrease long-term assets 
C) Activities that create revenue or expenses in the entity's major line of business 
D) None of the above

Question 14

A purpose of the statement of cash flows may be which of the following?

Accepted Answer

A) The purpose of the statement of cash flows is to evaluate the decisions made by the board of directors. 
B) The purpose of the statement of cash flows is to determine a company's ability to pay dividends to stockholders and interest and principle to its creditors. 
C) The purpose of the statement of cash flows is to help predict the decisions of its managers. 
D) The purpose of the statement of cash flows is to report the earnings per share 
A) The purpose of the statement of cash flows is to evaluate the decisions made by the board of directors. 
B) The purpose of the statement of cash flows is to determine a company's ability to pay dividends to stockholders and interest and principle to its creditors. 
C) The purpose of the statement of cash flows is to help predict the decisions of its managers. 
D) The purpose of the statement of cash flows is to report the earnings per share

Question 15

A company uses the indirect method to prepare the statement of cash flows.It presents the following data on its financial statements:
 
*Relates solely to the acquisition of inventory
What will appear in the operating activities section related to inventory?

Accepted Answer

A) The decrease of $15,000 will be subtracted from net income. 
B) The decrease of $15,000 will be subtracted from cost of goods sold. 
C) The decrease of $15,000 will be added to net income. 
D) The decrease of $15,000 will be added to cost of goods sold. 
A) The decrease of $15,000 will be subtracted from net income. 
B) The decrease of $15,000 will be subtracted from cost of goods sold. 
C) The decrease of $15,000 will be added to net income. 
D) The decrease of $15,000 will be added to cost of goods sold.

Question 16

How can a company that has shown net income in recent years be required to declare bankruptcy? How can the statement of cash flows provide an advanced warning about this possibility?

Accepted Answer

Net income results when revenues exceed

Question 17

A company purchases equipment for use in its business activities.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 purchase of equipment would be presented in the non-cash investing and financing activities section under both methods. 
B) The purchase of equipment would be presented in the financing activities section as a cash payment under both methods. 
C) The purchase of equipment would be presented in the investing activities section as a cash payment under both methods. 
D) The purchase of equipment would be presented in the operating activities section as a reduction in net income under the indirect method and as a cash payment under the direct method. 
A) The purchase of equipment would be presented in the non-cash investing and financing activities section under both methods. 
B) The purchase of equipment would be presented in the financing activities section as a cash payment under both methods. 
C) The purchase of equipment would be presented in the investing activities section as a cash payment under both methods. 
D) The purchase of equipment would be presented in the operating activities section as a reduction in net income under the indirect method and as a cash payment under the direct method.

Question 18

When a company uses the indirect method to present the statement of cash flows,cash received from the sale of a long-term asset increases the amount of net cash provided by investing activities.

Accepted Answer

A) True 
 B)False

Question 19

All of the following would be done when calculating the change in cash from operating activities under the indirect method except

Accepted Answer

A) deduct the purchase of equipment. 
B) add an increase in accrued interest payable. 
C) add a decrease in merchandise inventory. 
D) deduct a decrease in accounts payable. 
A) deduct the purchase of equipment. 
B) add an increase in accrued interest payable. 
C) add a decrease in merchandise inventory. 
D) deduct a decrease in accounts payable.

Question 20

The managerial accountant at American Memorial Shoppe reported the following data that reflect the balance sheets during the period ending December 31,20X2 and December 31,20X3:   
Compute the balances and analyze the changes that occurred in 20X3 and 20X2.Which accounts had increases? Which accounts had decreases?

Accepted Answer

The answer of The managerial accountant at American Memorial Shoppe...

Which of the following is/are created by operating activities?

Which of the following is the primary source of cash over the life of a business?

Use the indirect method of preparing a statement of cash flows to answer the question. Ending balances for Sunday Hut are listed below: Net income for this year was $97,000 and dividends of $24,000 were declared and paid during this year. What was the net cash provided by financing activities?

In a company that uses the direct method to prepare the statement of cash flows,the amount of cash it pays to employees is computed as

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

Creditor and stockholder transactions are considered ________ activities.

If a company uses the indirect method to prepare the statement of cash flows,which of the following items would be subtracted from net income to determine the net cash flow from operating activities?

A company uses the indirect method to prepare the statement of cash flows.In determining the net cash flow from operating activities,which of the following items would be added to net income?

Which of the following would appear on a statement of cash flows prepared using the direct method?

Activities that are included in the operating activities section of the statement of cash flows include which of the following activities?

A purpose of the statement of cash flows may be which of the following?

A company uses the indirect method to prepare the statement of cash flows.It presents the following data on its financial statements: *Relates solely to the acquisition of inventory What will appear in the operating activities section related to inventory?

How can a company that has shown net income in recent years be required to declare bankruptcy? How can the statement of cash flows provide an advanced warning about this possibility?

A company purchases equipment for use in its business activities.If the company prepares the statement of cash flows using the indirect method or the direct method,where would this transaction appear?

When a company uses the indirect method to present the statement of cash flows,cash received from the sale of a long-term asset increases the amount of net cash provided by investing activities.

All of the following would be done when calculating the change in cash from operating activities under the indirect method except

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 is/are created by operating activities?

Which of the following is the primary source of cash over the life of a business?

Use the indirect method of preparing a statement of cash flows to answer the question. Ending balances for Sunday Hut are listed below: Net income for this year was $97,000 and dividends of $24,000 were declared and paid during this year. What was the net cash provided by financing activities?

In a company that uses the direct method to prepare the statement of cash flows,the amount of cash it pays to employees is computed as

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

Creditor and stockholder transactions are considered ________ activities.

If a company uses the indirect method to prepare the statement of cash flows,which of the following items would be subtracted from net income to determine the net cash flow from operating activities?

A company uses the indirect method to prepare the statement of cash flows.In determining the net cash flow from operating activities,which of the following items would be added to net income?

Which of the following would appear on a statement of cash flows prepared using the direct method?

Activities that are included in the operating activities section of the statement of cash flows include which of the following activities?

A purpose of the statement of cash flows may be which of the following?

A company uses the indirect method to prepare the statement of cash flows.It presents the following data on its financial statements: *Relates solely to the acquisition of inventory What will appear in the operating activities section related to inventory?

How can a company that has shown net income in recent years be required to declare bankruptcy? How can the statement of cash flows provide an advanced warning about this possibility?

A company purchases equipment for use in its business activities.If the company prepares the statement of cash flows using the indirect method or the direct method,where would this transaction appear?

When a company uses the indirect method to present the statement of cash flows,cash received from the sale of a long-term asset increases the amount of net cash provided by investing activities.

All of the following would be done when calculating the change in cash from operating activities under the indirect method except

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