Question 1

The indirect method reports individual operating cash outflows and cash inflows by activity.

Accepted Answer

A) True 
 B)False

Question 2

Based on the following information provided about a company's operations,calculate its cost of goods purchased and its cash paid for merchandise.

Accepted Answer

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Question 3

Use the following information about the calendar-year cash flows of MacArthur Company to prepare a statement of cash flows (direct method) and a schedule of noncash investing and financing activities.

Accepted Answer

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Question 4

A statement of cash flows should reconcile the differences between the beginning and ending balances of:

Accepted Answer

A) Net income. 
B) Equity. 
C) Cash and cash equivalents. 
D) Working capital. 
E) Cash,cash equivalents and short-term investments. 
A) Net income. 
B) Equity. 
C) Cash and cash equivalents. 
D) Working capital. 
E) Cash,cash equivalents and short-term investments.

Question 5

The conversion of preferred stock to common stock is disclosed in the financing section of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 6

Define and discuss the differences between operating,investing,and financing activities.

Accepted Answer

Operating activities involve the day-to-

Question 7

The cash flow on total assets ratio reflects the company's actual cash flows and,therefore,is affected by the accounting constraints of recognition and measurement for net income.

Accepted Answer

A) True 
 B)False

Question 8

A company reported operating cash flows of $23,400 in 2012 and $26,220 in 2013.The average total assets for the company in 2012 was $262,000 and $285,000 in 2013.Calculate the cash flow on total assets ratio for both years.Comment on the results.

Accepted Answer

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Question 9

Walker Company reports net income of $420,000 for the year ended December 31,2013.It also reports $75,600 depreciation expense and a gain of $11,000 on the sale of machinery.Its comparative balance sheets reveal a $33,600 decrease in accounts receivable,$17,220 increase in accounts payable,$9,240 increase in prepaid expenses,and $13,020 increase in wages payable.What is the net cash flows provided (used) by operating activities using the indirect method?

Accepted Answer

A) ($539,200) 
B) $300,800 
C) $561,200 
D) ($300,800) 
E) $539,200 
A) ($539,200) 
B) $300,800 
C) $561,200 
D) ($300,800) 
E) $539,200

Question 10

Use the following information and the indirect method to calculate the net cash provided or used by operating activities:

Accepted Answer

A) $12,700 
B) $13,900 
C) $20,900 
D) $28,400 
E) $35,900 
A) $12,700 
B) $13,900 
C) $20,900 
D) $28,400 
E) $35,900

Question 11

When preparing the operating section of the statement of cash flows using the indirect method,nonoperating gains are added back to net income.

Accepted Answer

A) True 
 B)False

Question 12

The appropriate section in the statement of cash flows for reporting the receipt of cash dividends from investments in securities is:

Accepted Answer

A) Operating activities. 
B) Financing activities. 
C) Investing activities. 
D) Schedule of noncash investing or financing activity. 
E) None of these as this is not reported on the statement of cash flows. 
A) Operating activities. 
B) Financing activities. 
C) Investing activities. 
D) Schedule of noncash investing or financing activity. 
E) None of these as this is not reported on the statement of cash flows.

Question 13

Use the following information and the indirect method to calculate the net cash provided or used by operating activities:

Accepted Answer

A) $22,000 
B) $117,000 
C) $69,000 
D) $37,000 
E) $91,000 
A) $22,000 
B) $117,000 
C) $69,000 
D) $37,000 
E) $91,000

Question 14

The statement of cash flows is divided into three sections called the _____________,_____________ and _______________ sections.

Accepted Answer

operating,

Question 15

A company reported operating cash flows of $57,000 and average total assets of $962,000.Calculate the company's cash flow on total assets ratio.

Accepted Answer

$57,000/$9

Question 16

Managers only use the cash flow statement to evaluate the overall net cash increase or decrease and do not pay much attention to the details of cash flows from operating activities,cash flows from investing activities,and cash flows from financing activities.

Accepted Answer

A) True 
 B)False

Question 17

When the operating activities section of the statement of cash flows is reported using the direct method,the FASB requires:

Accepted Answer

A) A reconciliation to the statement of cash flows under the indirect method. 
B) A reconciliation of net income to net cash provided or used by operating activities. 
C) Footnotes to the financial statements disclosing the difference between net income and the cash provided or used by financing activities. 
D) The income statement to be prepared under the cash basis of accounting. 
E) Noncash investing and financing activities must be included in the statement of cash flows. 
A) A reconciliation to the statement of cash flows under the indirect method. 
B) A reconciliation of net income to net cash provided or used by operating activities. 
C) Footnotes to the financial statements disclosing the difference between net income and the cash provided or used by financing activities. 
D) The income statement to be prepared under the cash basis of accounting. 
E) Noncash investing and financing activities must be included in the statement of cash flows.

Question 18

Use the following calendar-year information to prepare David Company's statement of cash flows using the direct method.

Accepted Answer

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Question 19

On a spreadsheet used to prepare the operating section of the statement of cash flows,depreciation expense does not require an entry in the Analysis of Changes column as it is a noncash item.

Accepted Answer

A) True 
 B)False

Question 20

A company's cash flow on total assets ratio equals 16%.If average total assets equal $2,937,500 and total cash flows equal $600,000,what is the amount of cash flows from operations?

Accepted Answer

A) $18,359,375 
B) $600,000 
C) $470,000 
D) $96,000 
E) $566,000 
A) $18,359,375 
B) $600,000 
C) $470,000 
D) $96,000 
E) $566,000

The indirect method reports individual operating cash outflows and cash inflows by activity.

Based on the following information provided about a company's operations,calculate its cost of goods purchased and its cash paid for merchandise.

Use the following information about the calendar-year cash flows of MacArthur Company to prepare a statement of cash flows (direct method) and a schedule of noncash investing and financing activities.

A statement of cash flows should reconcile the differences between the beginning and ending balances of:

The conversion of preferred stock to common stock is disclosed in the financing section of the statement of cash flows.

Define and discuss the differences between operating,investing,and financing activities.

The cash flow on total assets ratio reflects the company's actual cash flows and,therefore,is affected by the accounting constraints of recognition and measurement for net income.

A company reported operating cash flows of $23,400 in 2012 and $26,220 in 2013.The average total assets for the company in 2012 was $262,000 and $285,000 in 2013.Calculate the cash flow on total assets ratio for both years.Comment on the results.

Use the following information and the indirect method to calculate the net cash provided or used by operating activities:

When preparing the operating section of the statement of cash flows using the indirect method,nonoperating gains are added back to net income.

The appropriate section in the statement of cash flows for reporting the receipt of cash dividends from investments in securities is:

Use the following information and the indirect method to calculate the net cash provided or used by operating activities:

The statement of cash flows is divided into three sections called the _______,_ and _________ sections.

A company reported operating cash flows of $57,000 and average total assets of $962,000.Calculate the company's cash flow on total assets ratio.

Managers only use the cash flow statement to evaluate the overall net cash increase or decrease and do not pay much attention to the details of cash flows from operating activities,cash flows from investing activities,and cash flows from financing activities.

When the operating activities section of the statement of cash flows is reported using the direct method,the FASB requires:

Use the following calendar-year information to prepare David Company's statement of cash flows using the direct method.

On a spreadsheet used to prepare the operating section of the statement of cash flows,depreciation expense does not require an entry in the Analysis of Changes column as it is a noncash item.

A company's cash flow on total assets ratio equals 16%.If average total assets equal $2,937,500 and total cash flows equal $600,000,what is the amount of cash flows from operations?

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 12: Reporting and Analyzing Cash Flows

The indirect method reports individual operating cash outflows and cash inflows by activity.

Based on the following information provided about a company's operations,calculate its cost of goods purchased and its cash paid for merchandise.

Use the following information about the calendar-year cash flows of MacArthur Company to prepare a statement of cash flows (direct method) and a schedule of noncash investing and financing activities.

A statement of cash flows should reconcile the differences between the beginning and ending balances of:

The conversion of preferred stock to common stock is disclosed in the financing section of the statement of cash flows.

Define and discuss the differences between operating,investing,and financing activities.

The cash flow on total assets ratio reflects the company's actual cash flows and,therefore,is affected by the accounting constraints of recognition and measurement for net income.

A company reported operating cash flows of $23,400 in 2012 and $26,220 in 2013.The average total assets for the company in 2012 was $262,000 and $285,000 in 2013.Calculate the cash flow on total assets ratio for both years.Comment on the results.

Use the following information and the indirect method to calculate the net cash provided or used by operating activities:

When preparing the operating section of the statement of cash flows using the indirect method,nonoperating gains are added back to net income.

The appropriate section in the statement of cash flows for reporting the receipt of cash dividends from investments in securities is:

Use the following information and the indirect method to calculate the net cash provided or used by operating activities:

The statement of cash flows is divided into three sections called the _____________,_____________ and _______________ sections.

A company reported operating cash flows of $57,000 and average total assets of $962,000.Calculate the company's cash flow on total assets ratio.

Managers only use the cash flow statement to evaluate the overall net cash increase or decrease and do not pay much attention to the details of cash flows from operating activities,cash flows from investing activities,and cash flows from financing activities.

When the operating activities section of the statement of cash flows is reported using the direct method,the FASB requires:

Use the following calendar-year information to prepare David Company's statement of cash flows using the direct method.

On a spreadsheet used to prepare the operating section of the statement of cash flows,depreciation expense does not require an entry in the Analysis of Changes column as it is a noncash item.

A company's cash flow on total assets ratio equals 16%.If average total assets equal $2,937,500 and total cash flows equal $600,000,what is the amount of cash flows from operations?

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

The statement of cash flows is divided into three sections called the _______,_ and _________ sections.