Question 1

The appropriate section in the statement of cash flows for reporting the purchase of land in exchange for common stock is:

Accepted Answer

A)  Operating activities. 
B)  Financing activities. 
C)  Investing activities. 
D)  Schedule of noncash investing or financing activity. 
E)  Reconciliation of cash balance. 
A)  Operating activities. 
B)  Financing activities. 
C)  Investing activities. 
D)  Schedule of noncash investing or financing activity. 
E)  Reconciliation of cash balance. D

Question 2

The direct method separately lists each major item of operating cash receipts and cash payments.

Accepted Answer

A) True 
 B)False  True

Question 3

Use the following information to calculate cash received from dividends:
$$\begin{array} { l r } 
\text { Dividends revenue } & \$ 63,500 \
\text { Dividends receivable, January 1 } & 3,600 \
\text { Dividends receivable, December } 31 & 3,100
\end{array}$$

Accepted Answer

A)  $63,500. 
B)  $63,000. 
C)  $64,000. 
D)  $67,100. 
E)  $60,400. 
A)  $63,500. 
B)  $63,000. 
C)  $64,000. 
D)  $67,100. 
E)  $60,400. C

Question 4

________ activities include the cash effects of transactions and events that determine net income.

Accepted Answer

The answer of ________ activities include the cash effects of...

Question 5

A cash dividend payment to shareholders during the year should be reported on the statement of cash flows as:

Accepted Answer

A)  An increase in cash flows from financing activities 
B)  An increase in cash flows from investing activities 
C)  A decrease in cash flows from operating activities 
D)  A decrease in cash flows from investing activities 
E)  A decrease in cash flows from financing activities 
A)  An increase in cash flows from financing activities 
B)  An increase in cash flows from investing activities 
C)  A decrease in cash flows from operating activities 
D)  A decrease in cash flows from investing activities 
E)  A decrease in cash flows from financing activities

Question 6

When preparing the operating activities section of the statement of cash flows using the direct method,non-operating gains are added to net income.

Accepted Answer

A) True 
 B)False

Question 7

Most managers stress the importance of understanding and predicting cash flows for business decisions.

Accepted Answer

A) True 
 B)False

Question 8

Use the following information to calculate cash paid for income taxes:
$$\begin{array} { | l | r | } 
\hline \text { Income tax expense } & \$ 43,000\
\hline \text { Income tax payable, January 1 } & 9,100 \
\hline \text { Income tax payable, December } 31 & 10,200 \
\hline
\end{array}$$

Accepted Answer

A)  $23,700. 
B)  $52,100. 
C)  $53,200. 
D)  $41,900. 
E)  $43,000. 
A)  $23,700. 
B)  $52,100. 
C)  $53,200. 
D)  $41,900. 
E)  $43,000.

Question 9

The cash flow on total assets ratio is calculated by:

Accepted Answer

A)  Dividing cash flows from operations by average total assets. 
B)  Dividing total cash flows by average total assets. 
C)  Dividing average total assets by cash flows from investing activities. 
D)  Dividing average total assets by total cash flows. 
E)  Total cash flows divided by average total assets times 365. 
A)  Dividing cash flows from operations by average total assets. 
B)  Dividing total cash flows by average total assets. 
C)  Dividing average total assets by cash flows from investing activities. 
D)  Dividing average total assets by total cash flows. 
E)  Total cash flows divided by average total assets times 365.

Question 10

The reporting of investing activities in the statement of cash flows is identical under either the direct or indirect methods.

Accepted Answer

A) True 
 B)False

Question 11

Use the following information to calculate cash paid for income taxes:
$$\begin{array}{l}
\text { Income tax expense } \$ 50,000\
\begin{array}{|l|l|}
\hline \text { Income tax payable, January 1 } & 9,000 \
\hline \text { Income tax payable, December 31 } & 7,000
\end{array}\end{array}$$

Accepted Answer

A)  $50,000. 
B)  $59,000. 
C)  $57,000. 
D)  $48,000. 
E)  $52,000. 
A)  $50,000. 
B)  $59,000. 
C)  $57,000. 
D)  $48,000. 
E)  $52,000.

Question 12

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

Question 13

The accountant for Huckleberry Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available:
$$\begin{array} { | l | r | } 
\hline \text { Retained earnings balance at the beginning of the year } & \$ 151,000 \
\hline \text { Cash dividends declared for the year } & 46,000 \
\hline \text { Net income for the year } & 92,000 \
\hline
\end{array}$$
What is the ending balance for retained earnings?

Accepted Answer

A)  $264,000. 
B)  $13,000. 
C)  $243,000. 
D)  $197,000. 
E)  $105,000. 
A)  $264,000. 
B)  $13,000. 
C)  $243,000. 
D)  $197,000. 
E)  $105,000.

Question 14

The gain or loss from retirement of debt is reported under cash flows from operating activities on the statement of cash flows using the indirect method.

Accepted Answer

A) True 
 B)False

Question 15

Both the direct and indirect methods yield the identical net cash flow amount provided or used by operating activities.

Accepted Answer

A) True 
 B)False

Question 16

In preparing a company's statement of cash flows for the most recent year using the indirect method,the following information is available:
$$\begin{array} { | l | r | } 
\hline \text { Net income for the year was } & \$ 52,000 \
\hline \text { Accounts payable decreased by } & \$ 18,000 \
\hline \text { Accounts receivable increased by } & \$ 25,000 \
\hline \text { Inventories increased by } & \$ 5,000 \
\hline \text { Cash dividends paid were } & \$ 14,000 \
\hline \text { Depreciation expense was } & \$ 20,000 \
\hline
\end{array}$$
Net cash provided by operating activities was:

Accepted Answer

A)  $120,000. 
B)  $71,000. 
C)  $70,000. 
D)  $24,000. 
E)  $110,000 
A)  $120,000. 
B)  $71,000. 
C)  $70,000. 
D)  $24,000. 
E)  $110,000

Question 17

Rowan,Inc.'s,income statement is shown below.Based on this income statement and the other information provided,calculate the net cash provided by operations using the indirect method.

Accepted Answer

\[\begin{array} { | l | l | l | } 
\hlin

Question 18

A cash equivalent must be readily convertible to a known amount of cash,and must be sufficiently close to its maturity so its market value is unaffected by interest rate changes.

Accepted Answer

A) True 
 B)False

Question 19

Receipts of cash dividends and interest earned on loans are classified as investing activities.

Accepted Answer

A) True 
 B)False

Question 20

Faster Freight Co.reported net cash provided by operating activities of $142.7 million and average total assets of 1,762.5 million at the end of the year.Calculate the cash flow on total assets ratio for Faster Freight.

Accepted Answer

Cash Flow on Total A

The appropriate section in the statement of cash flows for reporting the purchase of land in exchange for common stock is:

The direct method separately lists each major item of operating cash receipts and cash payments.

Use the following information to calculate cash received from dividends: Dividends revenue \ 63,500 Dividends receivable, January 1 3,600 Dividends receivable, December 31 3,100

________ activities include the cash effects of transactions and events that determine net income.

A cash dividend payment to shareholders during the year should be reported on the statement of cash flows as:

When preparing the operating activities section of the statement of cash flows using the direct method,non-operating gains are added to net income.

Most managers stress the importance of understanding and predicting cash flows for business decisions.

Use the following information to calculate cash paid for income taxes: Income tax expense \ 43,000 Income tax payable, January 1 9,100 Income tax payable, December 31 10,200

The cash flow on total assets ratio is calculated by:

The reporting of investing activities in the statement of cash flows is identical under either the direct or indirect methods.

Use the following information to calculate cash paid for income taxes: Income tax expense \ 50,000 Income tax payable, January 1 9,000 Income tax payable, December 31 7,000

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.

The gain or loss from retirement of debt is reported under cash flows from operating activities on the statement of cash flows using the indirect method.

Both the direct and indirect methods yield the identical net cash flow amount provided or used by operating activities.

Rowan,Inc.'s,income statement is shown below.Based on this income statement and the other information provided,calculate the net cash provided by operations using the indirect method.

A cash equivalent must be readily convertible to a known amount of cash,and must be sufficiently close to its maturity so its market value is unaffected by interest rate changes.

Receipts of cash dividends and interest earned on loans are classified as investing activities.

Faster Freight Co.reported net cash provided by operating activities of $142.7 million and average total assets of 1,762.5 million at the end of the year.Calculate the cash flow on total assets ratio for Faster Freight.

Accounting in Business

Analyzing 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

Time Value of Money

Investments

Partnership Accounting

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Exam 12: Reporting Cash Flows

The appropriate section in the statement of cash flows for reporting the purchase of land in exchange for common stock is:

The direct method separately lists each major item of operating cash receipts and cash payments.

Use the following information to calculate cash received from dividends: Dividends revenue \ 63,500 Dividends receivable, January 1 3,600 Dividends receivable, December 31 3,100

________ activities include the cash effects of transactions and events that determine net income.

A cash dividend payment to shareholders during the year should be reported on the statement of cash flows as:

When preparing the operating activities section of the statement of cash flows using the direct method,non-operating gains are added to net income.

Most managers stress the importance of understanding and predicting cash flows for business decisions.

Use the following information to calculate cash paid for income taxes: Income tax expense \ 43,000 Income tax payable, January 1 9,100 Income tax payable, December 31 10,200

The cash flow on total assets ratio is calculated by:

The reporting of investing activities in the statement of cash flows is identical under either the direct or indirect methods.

Use the following information to calculate cash paid for income taxes: Income tax expense \ 50,000 Income tax payable, January 1 9,000 Income tax payable, December 31 7,000

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.

The gain or loss from retirement of debt is reported under cash flows from operating activities on the statement of cash flows using the indirect method.

Both the direct and indirect methods yield the identical net cash flow amount provided or used by operating activities.

Rowan,Inc.'s,income statement is shown below.Based on this income statement and the other information provided,calculate the net cash provided by operations using the indirect method.

A cash equivalent must be readily convertible to a known amount of cash,and must be sufficiently close to its maturity so its market value is unaffected by interest rate changes.

Receipts of cash dividends and interest earned on loans are classified as investing activities.

Faster Freight Co.reported net cash provided by operating activities of $142.7 million and average total assets of 1,762.5 million at the end of the year.Calculate the cash flow on total assets ratio for Faster Freight.

Accounting in Business

Analyzing 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

Time Value of Money

Investments

Partnership Accounting

Filters