Question 1

Which of the following is not a current reporting requirement for a statement that reports changes in cash over a period of time?

Accepted Answer

A) This statement must classify cash flows into three categories: operating,investing,and financing activities. 
B) Cash equivalents must be combined with cash in preparing this statement. 
C) Working capital may be used as a substitute for cash in preparing this statement. 
D) The title for this statement is "Statement of Cash Flows." 
A) This statement must classify cash flows into three categories: operating,investing,and financing activities. 
B) Cash equivalents must be combined with cash in preparing this statement. 
C) Working capital may be used as a substitute for cash in preparing this statement. 
D) The title for this statement is "Statement of Cash Flows."

Question 2

Cash flows from operating activities usually relate to an increase or decrease in either a current asset or a current liability.

Accepted Answer

A) True 
 B)False

Question 3

When using the indirect method,the gain from selling a long-term investment is recognized in which of the following?

Accepted Answer

A) In the Operating Activities and Investing Activities sections of the statement of cash flows 
B) In the Financing Activities section of the statement of cash flows 
C) In the noncash Investing or Financing Activities supplemental section of the statement of cash flows 
D) Gains are not recognized in the statement of cash flows under the indirect method 
A) In the Operating Activities and Investing Activities sections of the statement of cash flows 
B) In the Financing Activities section of the statement of cash flows 
C) In the noncash Investing or Financing Activities supplemental section of the statement of cash flows 
D) Gains are not recognized in the statement of cash flows under the indirect method

Question 4

Which of the following is not an investing activity?

Accepted Answer

A) Purchase of investments for cash 
B) Purchase of equipment for cash 
C) Sale of merchandise for cash 
D) Sale of land for cash 
A) Purchase of investments for cash 
B) Purchase of equipment for cash 
C) Sale of merchandise for cash 
D) Sale of land for cash

Question 5

The work sheet used to prepare a statement of cash flows (indirect method to determine cash flows from operating activities)should have a total in the Changes column equal to total assets.

Accepted Answer

A) True 
 B)False

Question 6

Cash flows from purchases of merchandise are classified as investing activities.

Accepted Answer

A) True 
 B)False

Question 7

Cash flows from acquiring and disposing of long-term assets are classified as

Accepted Answer

A) operating activities. 
B) investing activities. 
C) financing activities. 
D) purchasing activities. 
A) operating activities. 
B) investing activities. 
C) financing activities. 
D) purchasing activities.

Question 8

Nordic Exports Inc.reported net income of $150,000 for 2017,but its cash balance decreased $40,000.Which financial statement should Nordic Exports' management refer to for an explanation of this situation?

Accepted Answer

A) Balance sheet 
B) Income statement 
C) Statement of retained earnings 
D) Statement of cash flows 
A) Balance sheet 
B) Income statement 
C) Statement of retained earnings 
D) Statement of cash flows

Question 9

The financial statement that primarily reflects events related to the operating activities of a business or the selling of products or providing services is the __________.

Accepted Answer

The answer of The financial statement that primarily reflects events...

Question 10

Use the information below for Dakota Corp.for 2017 and 2018 to answer the following question: $\begin{array}{lr}
\text { Bonds payable, December } 31,2017 & \$ 500,000 \
\text { Bonds payable, December } 31,2018 & 800,000 \
\text { Loss on bond retirement-2018 } & 15,000 \
\text { Interest expense on bonds-2018 } & 45,000
\end{array}$At the end of 2018,Dakota issued bonds at par value for $800,000 cash.The proceeds from these bonds were used to retire the $500,000 bond issue outstanding at the end of 2017 (before their maturity date).All interest expense was paid in cash during 2018.
How much did Dakota pay to retire the $500,000 bond issue during 2018?

Accepted Answer

A) $485,000 
B) $500,000 
C) $515,000 
D) $560,000 
A) $485,000 
B) $500,000 
C) $515,000 
D) $560,000

Question 11

Cash flows from acquiring and selling products are classified as

Accepted Answer

A) operating activities. 
B) investing activities. 
C) financing activities. 
D) distribution activities. 
A) operating activities. 
B) investing activities. 
C) financing activities. 
D) distribution activities.

Question 12

Which of the following statements is false?

Accepted Answer

A) The method of preparing the Operating Activities section of a statement of cash flows that adjusts net income to remove the effects of deferrals and accruals for revenues and expenses is the indirect method. 
B) The method of preparing the Operating Activities section of a statement of cash flows that reports major classes of gross cash receipts and cash payments for revenues and expenses is the direct method. 
C) The FASB prefers the direct method of preparing the Operating Activities section of the statement of cash flows. 
D) Most companies use the direct method of preparing the Operating Activities section of the statement of cash flows. 
A) The method of preparing the Operating Activities section of a statement of cash flows that adjusts net income to remove the effects of deferrals and accruals for revenues and expenses is the indirect method. 
B) The method of preparing the Operating Activities section of a statement of cash flows that reports major classes of gross cash receipts and cash payments for revenues and expenses is the direct method. 
C) The FASB prefers the direct method of preparing the Operating Activities section of the statement of cash flows. 
D) Most companies use the direct method of preparing the Operating Activities section of the statement of cash flows.

Which of the following is not a current reporting requirement for a statement that reports changes in cash over a period of time?

Cash flows from operating activities usually relate to an increase or decrease in either a current asset or a current liability.

When using the indirect method,the gain from selling a long-term investment is recognized in which of the following?

Which of the following is not an investing activity?

The work sheet used to prepare a statement of cash flows (indirect method to determine cash flows from operating activities)should have a total in the Changes column equal to total assets.

Cash flows from purchases of merchandise are classified as investing activities.

Cash flows from acquiring and disposing of long-term assets are classified as

Nordic Exports Inc.reported net income of $150,000 for 2017,but its cash balance decreased $40,000.Which financial statement should Nordic Exports' management refer to for an explanation of this situation?

The financial statement that primarily reflects events related to the operating activities of a business or the selling of products or providing services is the __________.

Cash flows from acquiring and selling products are classified as

Which of the following statements is false?

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

Financial Statement Analysis

International Financial Reporting Standards

Filters

Exam 12: The Statement of Cash Flows

Which of the following is not a current reporting requirement for a statement that reports changes in cash over a period of time?

Cash flows from operating activities usually relate to an increase or decrease in either a current asset or a current liability.

When using the indirect method,the gain from selling a long-term investment is recognized in which of the following?

Which of the following is not an investing activity?

The work sheet used to prepare a statement of cash flows (indirect method to determine cash flows from operating activities)should have a total in the Changes column equal to total assets.

Cash flows from purchases of merchandise are classified as investing activities.

Cash flows from acquiring and disposing of long-term assets are classified as

Nordic Exports Inc.reported net income of $150,000 for 2017,but its cash balance decreased $40,000.Which financial statement should Nordic Exports' management refer to for an explanation of this situation?

The financial statement that primarily reflects events related to the operating activities of a business or the selling of products or providing services is the __________.

Cash flows from acquiring and selling products are classified as

Which of the following statements is false?

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

Financial Statement Analysis

International Financial Reporting Standards

Filters