Question 1

All of the following statements related to reporting cash flows from investing and financing activities are true except:

Accepted Answer

A) Reporting of financing activities is the same under the direct method and indirect method. 
B) Changes in noncurrent liability accounts and equity accounts are analyzed to determine cash flows from financing activities 
C) Changes in noncurrent asset accounts,current notes receivable,and current investments are analyzed to determine cash flows from investing activities. 
D) The direct method applies accrual accounting while the indirect method applies cash basis accounting. 
E) Reporting of investing activities is the same under the direct method and indirect method. 
A) Reporting of financing activities is the same under the direct method and indirect method. 
B) Changes in noncurrent liability accounts and equity accounts are analyzed to determine cash flows from financing activities 
C) Changes in noncurrent asset accounts,current notes receivable,and current investments are analyzed to determine cash flows from investing activities. 
D) The direct method applies accrual accounting while the indirect method applies cash basis accounting. 
E) Reporting of investing activities is the same under the direct method and indirect method. D

Question 2

A company's income statement showed the following: net income,$134,000; depreciation expense,$30,000; and gain on sale of plant assets,$4,000.An examination of the company's current assets and current liabilities showed the following changes: accounts receivable decreased $9,400; merchandise inventory increased $18,000; prepaid expenses increased $6,200; accounts payable increased $3,400.Calculate the net cash provided or used by operating activities.

Accepted Answer

A) $156,600. 
B) $141,000. 
C) $96,600. 
D) $148,600. 
E) $88,600. 
A) $156,600. 
B) $141,000. 
C) $96,600. 
D) $148,600. 
E) $88,600. D

Question 3

Investing activities do not include the:

Accepted Answer

A) Purchase of plant assets. 
B) Loaning of money in exchange for notes receivable. 
C) Issuance of common stock. 
D) Sale of plant assets. 
E) Sale of short-term investments other than cash equivalents. 
A) Purchase of plant assets. 
B) Loaning of money in exchange for notes receivable. 
C) Issuance of common stock. 
D) Sale of plant assets. 
E) Sale of short-term investments other than cash equivalents. C

Question 4

In preparing a company's statement of cash flows for the most recent year,the following information is available:  
-Net cash flows from investing activities for the year were:

Accepted Answer

A) $234,000 of net cash used. 
B) $120,000 of net cash provided. 
C) $340,000 of net cash used. 
D) $259,000 of net cash used. 
E) $280,000 of net cash provided. 
A) $234,000 of net cash used. 
B) $120,000 of net cash provided. 
C) $340,000 of net cash used. 
D) $259,000 of net cash used. 
E) $280,000 of net cash provided.

Question 5

The appropriate section in the statement of cash flows for reporting the cash payment of wages is:

Accepted Answer

A) Operating activities. 
B) Financing activities. 
C) Investing activities. 
D) Schedule of noncash investing or financing activity. 
E) 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) This is not reported on the statement of cash flows.

Question 6

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

Accepted Answer

operating; investing

Question 7

All cash transactions eventually affect noncash ________ accounts.

Accepted Answer

The answer of All cash transactions eventually affect noncash ________...

Question 8

A company reported net income of $318,000,operating cash flows of $218,000,total cash flows of $184,000,and average total assets of $898,000.Calculate its cash flow on total assets ratio.

Accepted Answer

Cash Flow on Total Assets = Op

Question 9

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

Accepted Answer

The answer of Use the following information about the calendar-year...

Question 10

The statement of cash flows is:

Accepted Answer

A) Another name for the statement of financial position. 
B) A financial statement that presents information about changes in equity during a period. 
C) A financial statement that reports the cash inflows and cash outflows for an accounting period,and that classifies those cash flows as operating activities,investing activities,or financing activities. 
D) A financial statement that lists the types and amounts of assets,liabilities,and equity of a business on a specific date. 
E) A financial statement that lists the types and amounts of the revenues and expenses of a business for an accounting period. 
A) Another name for the statement of financial position. 
B) A financial statement that presents information about changes in equity during a period. 
C) A financial statement that reports the cash inflows and cash outflows for an accounting period,and that classifies those cash flows as operating activities,investing activities,or financing activities. 
D) A financial statement that lists the types and amounts of assets,liabilities,and equity of a business on a specific date. 
E) A financial statement that lists the types and amounts of the revenues and expenses of a business for an accounting period.

Question 11

When preparing the operating activities section of the statement of cash flows using the indirect method,an increase in income taxes payable is added back to net income.

Accepted Answer

A) True 
 B)False

Question 12

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.

Accepted Answer

A) $218,000. 
B) $223,200. 
C) $220,000. 
D) $228,800. 
E) $234,000. 
A) $218,000. 
B) $223,200. 
C) $220,000. 
D) $228,800. 
E) $234,000.

Question 13

A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $40,000 cash.The total amount that should be reported in the operating section of the statement of cash flow as per indirect method is:

Accepted Answer

A) $17,000. 
B) $4,000. 
C) $57,000. 
D) $21,000. 
E) $5,000. 
A) $17,000. 
B) $4,000. 
C) $57,000. 
D) $21,000. 
E) $5,000.

Question 14

The reporting of financing activities in the statement of cash flows is identical under the direct method and indirect method.

Accepted Answer

A) True 
 B)False

Question 15

When preparing the operating activities section of the statement of cash flows using the direct method,revenues and gains with no cash inflows are added back to net income.

Accepted Answer

A) True 
 B)False

Question 16

Using the direct method,operating cash receipts includes cash received from customers.

Accepted Answer

A) True 
 B)False

Question 17

The indirect method for the preparation of the operating activities section of the statement of cash flows:

Accepted Answer

A) Separately lists each major item of operating cash receipts. 
B) Separately lists each major item of operating cash payments. 
C) Reports net income and then adjusts it for items necessary to determine net cash provided or used by operating activities. 
D) Is required if the company is a merchandiser. 
E) Must not be used in all circumstances. 
A) Separately lists each major item of operating cash receipts. 
B) Separately lists each major item of operating cash payments. 
C) Reports net income and then adjusts it for items necessary to determine net cash provided or used by operating activities. 
D) Is required if the company is a merchandiser. 
E) Must not be used in all circumstances.

Question 18

Northeast Inc.is preparing the company's statement of cash flows for the fiscal year just ended.Using the following information:
 
-Determine the amount of cash flows from investing activities:

Accepted Answer

A) ($107,700). 
B) $107,700. 
C) ($200,000). 
D) ($139,700). 
E) ($207,700). 
A) ($107,700). 
B) $107,700. 
C) ($200,000). 
D) ($139,700). 
E) ($207,700).

Question 19

When preparing the operating activities section of the statement of cash flows using the indirect method,decreases in current assets are added back to net income.

Accepted Answer

A) True 
 B)False

Question 20

When using a spreadsheet to prepare the statement of cash flows,an increase in accounts payable is entered in the Analysis of Changes columns with a debit in the statement of cash flows section and a credit in the balance sheet section.

Accepted Answer

A) True 
 B)False

Exam 12: Reporting Cash Flows

All of the following statements related to reporting cash flows from investing and financing activities are true except:

Investing activities do not include the:

In preparing a company's statement of cash flows for the most recent year,the following information is available: -Net cash flows from investing activities for the year were:

The appropriate section in the statement of cash flows for reporting the cash payment of wages is:

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

All cash transactions eventually affect noncash ________ accounts.

A company reported net income of $318,000,operating cash flows of $218,000,total cash flows of $184,000,and average total assets of $898,000.Calculate its cash flow on total assets ratio.

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

The statement of cash flows is:

When preparing the operating activities section of the statement of cash flows using the indirect method,an increase in income taxes payable is added back to net income.

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.

A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $40,000 cash.The total amount that should be reported in the operating section of the statement of cash flow as per indirect method is:

The reporting of financing activities in the statement of cash flows is identical under the direct method and indirect method.

When preparing the operating activities section of the statement of cash flows using the direct method,revenues and gains with no cash inflows are added back to net income.

Using the direct method,operating cash receipts includes cash received from customers.

The indirect method for the preparation of the operating activities section of the statement of cash flows:

Northeast Inc.is preparing the company's statement of cash flows for the fiscal year just ended.Using the following information: -Determine the amount of cash flows from investing activities:

When preparing the operating activities section of the statement of cash flows using the indirect method,decreases in current assets are added back to net income.

When using a spreadsheet to prepare the statement of cash flows,an increase in accounts payable is entered in the Analysis of Changes columns with a debit in the statement of cash flows section and a credit in the balance sheet section.

Accounting in Business

Accounting for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash,fraud,and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Time Value of Money

Investments

Lean Principles and Accounting

Filters

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