Question 1

The financial statement that summarizes the operating,investing,and financing activities of a business over a period of time is the __________.

Accepted Answer

statement

Question 2

Which of the following statements is false regarding how the cash flow effects of the changes in the Equipment and Accumulated Depreciation accounts would be reported on a statement of cash flows if the indirect method is used to prepare the Operating Activities section?

Accepted Answer

A) Cash proceeds from the sale of the equipment would be reported as a cash inflow in the Investing Activities section. 
B) The cash paid to purchase equipment would be reported as a cash outflow in the Investing Activities section 
C) Depreciation expense would be added to net income in the Operating Activities section. 
D) A loss on the sale of the equipment would be subtracted from net income in the Operating Activities section 
A) Cash proceeds from the sale of the equipment would be reported as a cash inflow in the Investing Activities section. 
B) The cash paid to purchase equipment would be reported as a cash outflow in the Investing Activities section 
C) Depreciation expense would be added to net income in the Operating Activities section. 
D) A loss on the sale of the equipment would be subtracted from net income in the Operating Activities section

Question 3

Some companies use a work sheet approach,which functions like the T account approach,as a tool to aid in preparing the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 4

A __________,is a useful device to help in the preparation of a statement of cash flows.

Accepted Answer

The answer of A __________,is a useful device to help...

Question 5

The following items were reported on the balance sheets and income statement for Bezos Corp.: $\begin{array}{lr}
\text { Accounts payable, December } 31,2017 & \$ 42,000 \
\text { Accounts payable, December } 31,2018 & 48,000 \
\text { Operating expenses } & 286,000
\end{array}$How would the change in accounts payable be reported in the Operating Activities section of the statement of cash flows under the indirect method?

Accepted Answer

A) As an addition to operating expenses 
B) As a deduction from operating expenses 
C) As an addition to net income 
D) As a deduction from net income 
A) As an addition to operating expenses 
B) As a deduction from operating expenses 
C) As an addition to net income 
D) As a deduction from net income

Question 6

Parks Company reported an increase of $370,000 in its accounts receivable during the year 2017.The company's statement of cash flows for 2017 using the direct method reported $1 million of cash received from customers.What amount of net sales must Parks have recorded in 2017?

Accepted Answer

A) $370,000 
B) $1,000,000 
C) $1,370,000 
D) $630,000 
A) $370,000 
B) $1,000,000 
C) $1,370,000 
D) $630,000

Question 7

When using the indirect method,how is the receipt of cash from the sale of long-term investments treated on the statement of cash flows?

Accepted Answer

A) As an operating activity 
B) As an investing activity 
C) As a financing activity 
D) As a noncash investing or financing activity 
A) As an operating activity 
B) As an investing activity 
C) As a financing activity 
D) As a noncash investing or financing activity

Question 8

The investment in stock of another company is considered a significant activity and thus is reported on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 9

Which method of preparing the Operating Activities section of a statement of cash flows adjusts net income to remove the effects of deferrals and accruals for revenues and expenses?

Accepted Answer

A) The direct method 
B) The indirect method 
C) Both the direct and indirect methods 
D) Neither the direct method nor the indirect method 
A) The direct method 
B) The indirect method 
C) Both the direct and indirect methods 
D) Neither the direct method nor the indirect method

Question 10

Presented below is the Operating Activities section of the statement of cash flows for Feline Friends Corp.for 2017:$$\begin{array}{l}
\text { Operating activities: }\
\begin{array} { l r } 
\text { Cash collected from customers } & \$ 165,000 \
\text { Cash payments for merchandise } & ( 83,000 ) \
\text { Cash payments for operating expenses } & \underline { ( 58,000 ) } \
\text { Net cash inflow from operating activities } & \$ 24,000
\end{array}
\end{array}$$ Which method of preparing the Operating Activities section has Feline used?

Accepted Answer

A) The direct method 
B) The indirect method 
C) Either method 
D) Cannot be determined without further information 
A) The direct method 
B) The indirect method 
C) Either method 
D) Cannot be determined without further information

Question 11

The issuance of common stock in exchange for a building would appear both as a cash inflow in the Financing Activities section of the cash flow statement and also as a cash outflow in the Investing Activities section.

Accepted Answer

A) True 
 B)False

Question 12

Two methods are available to prepare the Operating Activities section of a statement of cash flows.Which of the following statements regarding these two methods is false?

Accepted Answer

A) If a company uses the indirect method,it must separately disclose the cash payments made for interest and income taxes. 
B) If a company uses the direct method,it must present a separate schedule that reconciles net income to net cash from operating activities. 
C) Advocates of the direct method believe that the indirect method reveals too much by telling readers gross amounts of cash receipts and cash payments from operations. 
D) The FASB prefers the direct method,while most companies use the indirect method in practice. 
A) If a company uses the indirect method,it must separately disclose the cash payments made for interest and income taxes. 
B) If a company uses the direct method,it must present a separate schedule that reconciles net income to net cash from operating activities. 
C) Advocates of the direct method believe that the indirect method reveals too much by telling readers gross amounts of cash receipts and cash payments from operations. 
D) The FASB prefers the direct method,while most companies use the indirect method in practice.

Question 13

If the December 31,2017,balance of accounts payable is higher than the January 1,2017,balance,then the amount of cash payments will exceed the purchases on account for the year.

Accepted Answer

A) True 
 B)False

Question 14

Below are several transactions for Louisville Company: $$\begin{array} { l r } 
\text { Proceeds from issuance of bonds payable } & \$ 635,000 \
\text { Payment to purchase equipment } & 275,000 \
\text { Payment of wages } & 115,000 \
\text { Payment of dividends } & 155,000 \
\text { Payment to pay off notes payable } & 195,000
\end{array}$$Based on these transactions,what is the net cash flow from financing activities?

Accepted Answer

A) $285,000 net cash provided by financing activities 
B) $275,000 net cash used for financing activities 
C) $0,because cash inflows equal cash outflows from financing activities 
D) $440,000 net cash provided by financing activities 
A) $285,000 net cash provided by financing activities 
B) $275,000 net cash used for financing activities 
C) $0,because cash inflows equal cash outflows from financing activities 
D) $440,000 net cash provided by financing activities

Question 15

Which of the following is not a financing activity?

Accepted Answer

A) Issuing bonds for cash 
B) Selling an investment in IBM stock for cash 
C) Purchasing a company's own stock (treasury stock)for cash 
D) Making a cash payment to repay a bank loan 
A) Issuing bonds for cash 
B) Selling an investment in IBM stock for cash 
C) Purchasing a company's own stock (treasury stock)for cash 
D) Making a cash payment to repay a bank loan

Question 16

Kelly Corp.reported the following information for 2017 and 2018.$\begin{array}{lr}
\text { Salaries payable, December } 31,2017 & \$ 3,700 \
\text { Salaries payable, December } 31,2018 & 1,800 \
\text { Salaries expense-2018 } & 57,000
\end{array}$ How much cash was paid for salaries during 2018?

Accepted Answer

A) $55,100 
B) $55,200 
C) $57,000 
D) $58,900 
A) $55,100 
B) $55,200 
C) $57,000 
D) $58,900

Question 17

Ultra-lite Corp.began operations on January 1,2017.The statement of cash flows for the first year reported dividends paid of $180,000.The balance sheet at the end of the first year reported $60,000 in dividends payable and $600,000 in ending retained earnings.Determine Ultra-lite's net income for its first year of operations.

Accepted Answer

Since the company paid dividends during

Question 18

Which of the following activities is most likely to have a cash flow effect?

Accepted Answer

A) Investing in money market funds 
B) Declaring cash dividends 
C) Reissuing treasury stock 
D) Issuing stock to acquire a patent 
A) Investing in money market funds 
B) Declaring cash dividends 
C) Reissuing treasury stock 
D) Issuing stock to acquire a patent

Question 19

Under the __________,a company reports its major classes of gross cash receipts and cash payments in the Operating Activities section of the statement of cash flows.

Accepted Answer

The answer of Under the __________,a company reports its major...

Question 20

Determining the cash flows from operating activities generally requires analyzing each item on the income statement as well as the current asset (except cash)and current liability accounts.

Accepted Answer

A) True 
 B)False

The financial statement that summarizes the operating,investing,and financing activities of a business over a period of time is the __________.

Which of the following statements is false regarding how the cash flow effects of the changes in the Equipment and Accumulated Depreciation accounts would be reported on a statement of cash flows if the indirect method is used to prepare the Operating Activities section?

Some companies use a work sheet approach,which functions like the T account approach,as a tool to aid in preparing the statement of cash flows.

A __________,is a useful device to help in the preparation of a statement of cash flows.

Parks Company reported an increase of $370,000 in its accounts receivable during the year 2017.The company's statement of cash flows for 2017 using the direct method reported $1 million of cash received from customers.What amount of net sales must Parks have recorded in 2017?

When using the indirect method,how is the receipt of cash from the sale of long-term investments treated on the statement of cash flows?

The investment in stock of another company is considered a significant activity and thus is reported on the statement of cash flows.

Which method of preparing the Operating Activities section of a statement of cash flows adjusts net income to remove the effects of deferrals and accruals for revenues and expenses?

The issuance of common stock in exchange for a building would appear both as a cash inflow in the Financing Activities section of the cash flow statement and also as a cash outflow in the Investing Activities section.

Two methods are available to prepare the Operating Activities section of a statement of cash flows.Which of the following statements regarding these two methods is false?

If the December 31,2017,balance of accounts payable is higher than the January 1,2017,balance,then the amount of cash payments will exceed the purchases on account for the year.

Which of the following is not a financing activity?

Kelly Corp.reported the following information for 2017 and 2018. Salaries payable, December 31,2017 \ 3,700 Salaries payable, December 31,2018 1,800 Salaries expense-2018 57,000 How much cash was paid for salaries during 2018?

Which of the following activities is most likely to have a cash flow effect?

Under the __________,a company reports its major classes of gross cash receipts and cash payments in the Operating Activities section of the statement of cash flows.

Determining the cash flows from operating activities generally requires analyzing each item on the income statement as well as the current asset (except cash)and current liability accounts.

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

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Exam 12: The Statement of Cash Flows

The financial statement that summarizes the operating,investing,and financing activities of a business over a period of time is the __________.

Which of the following statements is false regarding how the cash flow effects of the changes in the Equipment and Accumulated Depreciation accounts would be reported on a statement of cash flows if the indirect method is used to prepare the Operating Activities section?

Some companies use a work sheet approach,which functions like the T account approach,as a tool to aid in preparing the statement of cash flows.

A __________,is a useful device to help in the preparation of a statement of cash flows.

Parks Company reported an increase of $370,000 in its accounts receivable during the year 2017.The company's statement of cash flows for 2017 using the direct method reported $1 million of cash received from customers.What amount of net sales must Parks have recorded in 2017?

When using the indirect method,how is the receipt of cash from the sale of long-term investments treated on the statement of cash flows?

The investment in stock of another company is considered a significant activity and thus is reported on the statement of cash flows.

Which method of preparing the Operating Activities section of a statement of cash flows adjusts net income to remove the effects of deferrals and accruals for revenues and expenses?

The issuance of common stock in exchange for a building would appear both as a cash inflow in the Financing Activities section of the cash flow statement and also as a cash outflow in the Investing Activities section.

Two methods are available to prepare the Operating Activities section of a statement of cash flows.Which of the following statements regarding these two methods is false?

If the December 31,2017,balance of accounts payable is higher than the January 1,2017,balance,then the amount of cash payments will exceed the purchases on account for the year.

Which of the following is not a financing activity?

Kelly Corp.reported the following information for 2017 and 2018. Salaries payable, December 31,2017 \ 3,700 Salaries payable, December 31,2018 1,800 Salaries expense-2018 57,000 How much cash was paid for salaries during 2018?

Which of the following activities is most likely to have a cash flow effect?

Under the __________,a company reports its major classes of gross cash receipts and cash payments in the Operating Activities section of the statement of cash flows.

Determining the cash flows from operating activities generally requires analyzing each item on the income statement as well as the current asset (except cash)and current liability accounts.

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