Question 1

The FASB requires a reconciliation of net income to net cash provided or used by operating activities when the ________ method is used.

Accepted Answer

The answer of The FASB requires a reconciliation of net...

Question 2

The accountant for Mandarin Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available:
$$\begin{array} { | l | r | } 
\hline \text { Retained earnings balance at the beginning of the year } & \$ 819,000 \
\hline \text { Net income for the year } & 230,000 \
\hline \text { Cash dividends declared for the year } & 42,000 \
\hline \text { Retained earnings balance at the end of the year } & 1,007,000 \
\hline \text { Cash dividends payable at the beginning of the year } &10,000  \
\hline \text { Cash dividends payable at the end of the year } & 11,000\
\hline
\end{array}$$
What is the amount of cash dividends paid that should be reported in the financing section of the statement of cash flows?

Accepted Answer

A)  $42,000. 
B)  $43,000. 
C)  $63,000. 
D)  $1,000. 
E)  $41,000. 
A)  $42,000. 
B)  $43,000. 
C)  $63,000. 
D)  $1,000. 
E)  $41,000.

Question 3

Business activities that generate or use cash are classified as operating,investing,or financing activities on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 4

Alvez reports net income of $305,000 for the year ended December 31.It also reports $93,700 depreciation expense and a $10,000 loss on the sale of equipment.Its comparative balance sheet reveals a $40,200 increase in accounts receivable,a $10,200 decrease in prepaid expenses,a $15,200 increase in accounts payable,a $12,500 decrease in wages payable,a $75,000 increase in equipment,and a $100,000 decrease in notes payable.Calculate the net increase in cash for the year.

Accepted Answer

A)  $216,400. 
B)  $281,400. 
C)  $381,400. 
D)  $206,400. 
E)  $406,400. 
A)  $216,400. 
B)  $281,400. 
C)  $381,400. 
D)  $206,400. 
E)  $406,400.

Question 5

The accounting principle that requires important noncash financing and investing activities be reported on the statement of cash flows or in a footnote is the:

Accepted Answer

A)  Historical cost principle. 
B)  Materiality principle. 
C)  Full disclosure principle. 
D)  Going concern principle. 
E)  Business entity principle. 
A)  Historical cost principle. 
B)  Materiality principle. 
C)  Full disclosure principle. 
D)  Going concern principle. 
E)  Business entity principle.

Question 6

Financing activities include receiving cash from issuing debt and receiving cash dividends from investments in other companies' stocks.

Accepted Answer

A) True 
 B)False

Question 7

For each of the following items, indicate whether it would be classified as an (O) operating activity, an (I) investing activity, a (F) financing activity, or a significant (N) noncash financing and investing activity.
-Paid cash dividends.

Accepted Answer

A) F 
B) O 
C) N 
D) I 
A) F 
B) O 
C) N 
D) I

Question 8

When preparing the operating activities section of the statement of cash flows using the indirect method,expenses with no cash outflows are added back to net income.

Accepted Answer

A) True 
 B)False

Question 9

Equipment costing $100,000 with accumulated depreciation of $40,000 is sold at a loss of $10,000.This implies that $40,000 cash was received from the sale.

Accepted Answer

A) True 
 B)False

Question 10

Use the following financial statements and additional information to (1)prepare a statement of cash flows for the year ended December 31,20X2 using the indirect method,and (2)compute the company's cash flow on total assets ratio for 20X2.

Additional Information
a.A $20,000 note payable is retired at its carrying value in exchange for cash.
b.The only changes affecting retained earnings are net income and cash dividends paid.
c.New equipment is acquired for $120,000 cash.
d.Received cash for the sale of equipment that had cost $85,000,yielding a gain of $4,700.
e.Prepaid expenses relate to Other Expenses on the income statement.
f.All purchases and sales of merchandise inventory are on credit.

Accepted Answer

(1)
 @#IMG-DLM& (2)$

Question 11

The statement of cash flows reports and proves the net change in cash for a reporting period.

Accepted Answer

A) True 
 B)False

Question 12

Use the following information to calculate cash received from dividends:
$$\begin{array} { l r } 
\text { Dividends revenue } & \$ 29,800 \
\text { Dividends receivable, January } 1 & 2,600 \
\text { Dividends receivable, December } 31 & 3,400
\end{array}$$

Accepted Answer

A)  $26,400. 
B)  $29,000. 
C)  $29,800. 
D)  $30,600. 
E)  $32,400. 
A)  $26,400. 
B)  $29,000. 
C)  $29,800. 
D)  $30,600. 
E)  $32,400.

Question 13

For each of the following items, indicate whether it would be classified as an (O) operating activity, an (I) investing activity, a (F) financing activity, or a significant (N) noncash financing and investing activity.
-Purchases of land for cash.

Accepted Answer

A) F 
B) O 
C) N 
D) I 
A) F 
B) O 
C) N 
D) I

Question 14

Of the following,which one affects cash during a period?

Accepted Answer

A)  The declaration of a stock dividend. 
B)  Writing off an uncollectible account receivable. 
C)  The declaration of a cash dividend. 
D)  An adjusting entry recognizing the expiration of prepaid insurance. 
E)  The payment of interest expense accrued in a previous accounting period. 
A)  The declaration of a stock dividend. 
B)  Writing off an uncollectible account receivable. 
C)  The declaration of a cash dividend. 
D)  An adjusting entry recognizing the expiration of prepaid insurance. 
E)  The payment of interest expense accrued in a previous accounting period.

Question 15

The accountant for Crusoe Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available:
$$\begin{array} { | l | r | } 
\hline \text { Retained earnings balance at the beginning of the year } & \$ 126,000 \
\hline \text { Cash dividends declared for the year } & 46,000 \
\hline \text { Proceeds from the sale of equipment } & 81,000 \
\hline \text { Gain on the sale of equipment } &7,000  \
\hline \text { Cash dividends payable at the beginning of the year } &18,000  \
\hline \text { Cash dividends payable at the end of the year } & 20,000\
\hline \text { Net income for the year } & 92,000\
\hline 
\end{array}$$
What is the ending balance for retained earnings?

Accepted Answer

A)  $218,000. 
B)  $170,000. 
C)  $352,000. 
D)  $172,000. 
E)  $179,000. 
A)  $218,000. 
B)  $170,000. 
C)  $352,000. 
D)  $172,000. 
E)  $179,000.

Question 16

Use the following information to calculate cash paid for salaries:
$$\begin{array} { | l | r | } 
\hline \text { Salaries expense } & \$ 175,000 \
\hline \text { Salaries payable, January 1 } & 20,000 \
\hline \text { Salaries payable, December 31 } & 12,000 \
\hline
\end{array}$$

Accepted Answer

A)  $175,000. 
B)  $183,000. 
C)  $167,000. 
D)  $143,000. 
E)  $155,000. 
A)  $175,000. 
B)  $183,000. 
C)  $167,000. 
D)  $143,000. 
E)  $155,000.

Question 17

The use of a spreadsheet for analysis is especially useful when preparing the statement of cash flows using the ________ method.

Accepted Answer

The answer of The use of a spreadsheet for analysis...

Question 18

The cash flow on total assets ratio reflects actual cash flows and is therefore affected by income recognition and measurement.

Accepted Answer

A) True 
 B)False

Question 19

When preparing a statement of cash flows using the indirect method,which of the following is correct?

Accepted Answer

A)  Proceeds from the sale of equipment should be added to net income in the operating activities section. 
B)  A loss on the sale of land should be added to net income in the operating activities section. 
C)  The declaration of a cash dividend should be a use of cash in the financing activities section. 
D)  The issuance of a stock dividend should be a use of cash in the financing activities section. 
E)  The purchase of land and a building by issuing a long-term note payable should be a source of cash in the financing activities section. 
A)  Proceeds from the sale of equipment should be added to net income in the operating activities section. 
B)  A loss on the sale of land should be added to net income in the operating activities section. 
C)  The declaration of a cash dividend should be a use of cash in the financing activities section. 
D)  The issuance of a stock dividend should be a use of cash in the financing activities section. 
E)  The purchase of land and a building by issuing a long-term note payable should be a source of cash in the financing activities section.

Question 20

Use the following financial statements and additional information to (1)prepare a complete statement of cash flows for the year ended December 31,20X2.The cash provided or used by operating activities should be reported using the direct method,and (2)compute the company's cash flow on total assets ratio for 20X2.

Additional Information
a.A $20,000 note payable is retired at its carrying value in exchange for cash.
b.The only changes affecting retained earnings are net income and cash dividends paid.
c.New equipment is acquired for $120,000 cash.
d.Received cash for the sale of equipment that had cost $85,000,yielding a gain of $4,700.
e.Prepaid expenses relate to Other Expenses on the income statement.
f.All purchases and sales of merchandise inventory are on credit.

Accepted Answer

(1)
 @#IMG-DLM& (2)$

The FASB requires a reconciliation of net income to net cash provided or used by operating activities when the ________ method is used.

Business activities that generate or use cash are classified as operating,investing,or financing activities on the statement of cash flows.

The accounting principle that requires important noncash financing and investing activities be reported on the statement of cash flows or in a footnote is the:

Financing activities include receiving cash from issuing debt and receiving cash dividends from investments in other companies' stocks.

For each of the following items, indicate whether it would be classified as an (O) operating activity, an (I) investing activity, a (F) financing activity, or a significant (N) noncash financing and investing activity. -Paid cash dividends.

When preparing the operating activities section of the statement of cash flows using the indirect method,expenses with no cash outflows are added back to net income.

Equipment costing $100,000 with accumulated depreciation of $40,000 is sold at a loss of $10,000.This implies that $40,000 cash was received from the sale.

The statement of cash flows reports and proves the net change in cash for a reporting period.

Use the following information to calculate cash received from dividends: Dividends revenue \ 29,800 Dividends receivable, January 1 2,600 Dividends receivable, December 31 3,400

For each of the following items, indicate whether it would be classified as an (O) operating activity, an (I) investing activity, a (F) financing activity, or a significant (N) noncash financing and investing activity. -Purchases of land for cash.

Of the following,which one affects cash during a period?

Use the following information to calculate cash paid for salaries: Salaries expense \ 175,000 Salaries payable, January 1 20,000 Salaries payable, December 31 12,000

The use of a spreadsheet for analysis is especially useful when preparing the statement of cash flows using the ________ method.

The cash flow on total assets ratio reflects actual cash flows and is therefore affected by income recognition and measurement.

When preparing a statement of cash flows using the indirect method,which of the following is correct?

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

Exam 12: Reporting Cash Flows

The FASB requires a reconciliation of net income to net cash provided or used by operating activities when the ________ method is used.

Business activities that generate or use cash are classified as operating,investing,or financing activities on the statement of cash flows.

The accounting principle that requires important noncash financing and investing activities be reported on the statement of cash flows or in a footnote is the:

Financing activities include receiving cash from issuing debt and receiving cash dividends from investments in other companies' stocks.

For each of the following items, indicate whether it would be classified as an (O) operating activity, an (I) investing activity, a (F) financing activity, or a significant (N) noncash financing and investing activity. -Paid cash dividends.

When preparing the operating activities section of the statement of cash flows using the indirect method,expenses with no cash outflows are added back to net income.

Equipment costing $100,000 with accumulated depreciation of $40,000 is sold at a loss of $10,000.This implies that $40,000 cash was received from the sale.

The statement of cash flows reports and proves the net change in cash for a reporting period.

Use the following information to calculate cash received from dividends: Dividends revenue \ 29,800 Dividends receivable, January 1 2,600 Dividends receivable, December 31 3,400

For each of the following items, indicate whether it would be classified as an (O) operating activity, an (I) investing activity, a (F) financing activity, or a significant (N) noncash financing and investing activity. -Purchases of land for cash.

Of the following,which one affects cash during a period?

Use the following information to calculate cash paid for salaries: Salaries expense \ 175,000 Salaries payable, January 1 20,000 Salaries payable, December 31 12,000

The use of a spreadsheet for analysis is especially useful when preparing the statement of cash flows using the ________ method.

The cash flow on total assets ratio reflects actual cash flows and is therefore affected by income recognition and measurement.

When preparing a statement of cash flows using the indirect method,which of the following is correct?

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