Question 1

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

Accepted Answer

A) cost of goods sold plus ending inventory. 
B) cost of goods sold plus ending inventory, plus beginning inventory. 
C) beginning inventory minus ending inventory, minus cost of goods sold. 
D) cost of goods sold plus ending inventory, minus beginning inventory. 
A) cost of goods sold plus ending inventory. 
B) cost of goods sold plus ending inventory, plus beginning inventory. 
C) beginning inventory minus ending inventory, minus cost of goods sold. 
D) cost of goods sold plus ending inventory, minus beginning inventory.

Question 2

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

Accepted Answer

A) Changes in accounts receivable 
B) Changes in depreciation 
C) Changes in accounts payable 
D) Changes in interest expense 
A) Changes in accounts receivable 
B) Changes in depreciation 
C) Changes in accounts payable 
D) Changes in interest expense

Question 3

Using the direct method to prepare the statement of cash flows, cash payments to supplies is computed as

Accepted Answer

A) interest expense minus the decrease in accounts payable. 
B) interest expense minus the decrease in merchandise inventory. 
C) purchases minus the increase in accounts payable. 
D) interest expense minus the increase in merchandise inventory. 
A) interest expense minus the decrease in accounts payable. 
B) interest expense minus the decrease in merchandise inventory. 
C) purchases minus the increase in accounts payable. 
D) interest expense minus the increase in merchandise inventory.

Question 4

If a company uses the indirect method to prepare the statement of cash flows, how will a loss from the sale of equipment be presented on the statement of cash flows?

Accepted Answer

A) A loss from the sale of equipment will be added to net income in the operating activities section in the statement of cash flows. 
B) A loss from the sale of equipment will be an addition in the financing activities section in the statement of cash flows. 
C) A loss from the sale of equipment will be deducted from net income in the operating activities section in the statement of cash flows. 
D) A loss from the sale of equipment will be an addition in the investing activities section in the statement of cash flows. 
A) A loss from the sale of equipment will be added to net income in the operating activities section in the statement of cash flows. 
B) A loss from the sale of equipment will be an addition in the financing activities section in the statement of cash flows. 
C) A loss from the sale of equipment will be deducted from net income in the operating activities section in the statement of cash flows. 
D) A loss from the sale of equipment will be an addition in the investing activities section in the statement of cash flows.

Question 5

When using the indirect method in the statement of cash flows, the company would subtract the net change in a current asset account if the balance increased over time.

Accepted Answer

A) True 
 B)False

Question 6

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 accounts payable transaction in the operating activities category in the statement of cash flows?

Accepted Answer

A) The increase of $13,000 will be subtracted from net income. 
B) The increase of $13,000 will be added to net income. 
C) The increase of $13,000 will be added to purchases to determine payments to suppliers. 
D) The increase of $13,000 will be subtracted from purchases to determine payments to suppliers. 
A) The increase of $13,000 will be subtracted from net income. 
B) The increase of $13,000 will be added to net income. 
C) The increase of $13,000 will be added to purchases to determine payments to suppliers. 
D) The increase of $13,000 will be subtracted from purchases to determine payments to suppliers.

Question 7

A cash flow statement shows $17,000 from operations, ($8900)from investing, and $25,000 from financing. The cash balance must have increased or decreased by

Accepted Answer

A) $33,100. 
B) $16,100. 
C) $50,900. 
D) $42,000. 
A) $33,100. 
B) $16,100. 
C) $50,900. 
D) $42,000.

Question 8

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 9

The direct method lists the receipt and payment of cash for specific operating activities.

Accepted Answer

A) True 
 B)False

Question 10

The statement of cash flows reflects cash flows during a period of time.

Accepted Answer

A) True 
 B)False

Question 11

The indirect method of presenting the investing activities section of the statement of cash flows reconciles net income to net cash provided by investing activities.

Accepted Answer

A) True 
 B)False

Question 12

The balance in the ________ is used to check the accuracy on the ending balance of the statement of cash flows.

Accepted Answer

A) asset and liability accounts 
B) liability accounts 
C) cash and cash equivalent accounts 
D) asset accounts 
A) asset and liability accounts 
B) liability accounts 
C) cash and cash equivalent accounts 
D) asset accounts

Question 13

All of the following are cash outflows from an operating activity except

Accepted Answer

A) payment of interest on a loan. 
B) payment for purchasing inventory. 
C) payment to the government for tax bill. 
D) owner withdrawal from the company. 
A) payment of interest on a loan. 
B) payment for purchasing inventory. 
C) payment to the government for tax bill. 
D) owner withdrawal from the company.

Question 14

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 15

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...

Question 16

When using the indirect method in the statement of cash flows, the company would subtract the net change in a current liability account if the balance increased over time.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following items would be reported as an operating activity on the statement of cash flows?

Accepted Answer

A) Purchase of equipment 
B) A payment of dividends 
C) Payment for rent 
D) Sale of equipment 
A) Purchase of equipment 
B) A payment of dividends 
C) Payment for rent 
D) Sale of equipment

Question 18

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
What will appear in the operating activities section related to accounts payable?

Accepted Answer

A) The increase of $18,000 will be subtracted from net income. 
B) The increase of $18,000 will be added to net income. 
C) The increase of $18,000 will be added to purchases to determine payments to suppliers. 
D) The increase of $18,000 will be subtracted from purchases to determine payments to suppliers. 
A) The increase of $18,000 will be subtracted from net income. 
B) The increase of $18,000 will be added to net income. 
C) The increase of $18,000 will be added to purchases to determine payments to suppliers. 
D) The increase of $18,000 will be subtracted from purchases to determine payments to suppliers.

Question 19

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 20

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.
What was the net cash inflow from financing activities?

Accepted Answer

The answer of Use the indirect method of preparing a...

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

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

Using the direct method to prepare the statement of cash flows, cash payments to supplies is computed as

If a company uses the indirect method to prepare the statement of cash flows, how will a loss from the sale of equipment be presented on the statement of cash flows?

When using the indirect method in the statement of cash flows, the company would subtract the net change in a current asset account if the balance increased over time.

A cash flow statement shows $17,000 from operations, ($8900)from investing, and $25,000 from financing. The cash balance must have increased or decreased by

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

The direct method lists the receipt and payment of cash for specific operating activities.

The statement of cash flows reflects cash flows during a period of time.

The indirect method of presenting the investing activities section of the statement of cash flows reconciles net income to net cash provided by investing activities.

The balance in the ________ is used to check the accuracy on the ending balance of the statement of cash flows.

All of the following are cash outflows from an operating activity except

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?

When using the indirect method in the statement of cash flows, the company would subtract the net change in a current liability account if the balance increased over time.

Which of the following items would be reported as an operating activity on the statement of cash flows?

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 What will appear in the operating activities section related to accounts payable?

Paying cash dividends would be

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. What was the net cash inflow from financing activities?

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 Evalulation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Financial Statement Analysis

Sustainability

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Exam 13: Statement of Cash Flows

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

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

Using the direct method to prepare the statement of cash flows, cash payments to supplies is computed as

If a company uses the indirect method to prepare the statement of cash flows, how will a loss from the sale of equipment be presented on the statement of cash flows?

When using the indirect method in the statement of cash flows, the company would subtract the net change in a current asset account if the balance increased over time.

A cash flow statement shows $17,000 from operations, ($8900)from investing, and $25,000 from financing. The cash balance must have increased or decreased by

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

The direct method lists the receipt and payment of cash for specific operating activities.

The statement of cash flows reflects cash flows during a period of time.

The indirect method of presenting the investing activities section of the statement of cash flows reconciles net income to net cash provided by investing activities.

The balance in the ________ is used to check the accuracy on the ending balance of the statement of cash flows.

All of the following are cash outflows from an operating activity except

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?

When using the indirect method in the statement of cash flows, the company would subtract the net change in a current liability account if the balance increased over time.

Which of the following items would be reported as an operating activity on the statement of cash flows?

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 What will appear in the operating activities section related to accounts payable?

Paying cash dividends would be

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. What was the net cash inflow from financing activities?

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 Evalulation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Financial Statement Analysis

Sustainability

Filters