Question 1

Which of the following items are included as an operating activity on the statement of cash flows,using the direct method?

Accepted Answer

A) purchase of treasury stock 
B) payment of dividends 
C) issuance of stock 
D) payment of interest expense 
A) purchase of treasury stock 
B) payment of dividends 
C) issuance of stock 
D) payment of interest expense

Question 2

Which of the following will be listed in the operating section of the statement of cash flows that is prepared using the indirect method?

Accepted Answer

A) collections from customers 
B) payments to suppliers 
C) interest received 
D) increases/decreases in current liabilities 
A) collections from customers 
B) payments to suppliers 
C) interest received 
D) increases/decreases in current liabilities

Question 3

The financing activities section of a statement prepared using the direct method includes changes in ________.

Accepted Answer

A) Accounts Payable 
B) Accounts Receivable 
C) Merchandise Inventory 
D) Long-term Notes Payable 
A) Accounts Payable 
B) Accounts Receivable 
C) Merchandise Inventory 
D) Long-term Notes Payable

Question 4

Manning Tint,Inc.uses the indirect method to prepare its statement of cash flows.Refer to the following portion of the comparative balance sheet:
 
Additional information provided by the company includes the following:
1.Equipment was purchased for $68,000.
2.Equipment with a cost of $36,000 and accumulated depreciation of $7,400 was sold for $50,000.
What was the amount of net cash provided by (used for)investing activities?

Accepted Answer

A) $177,000 
B) $18,000 
C) $(177,000) 
D) $(18,000) 
A) $177,000 
B) $18,000 
C) $(177,000) 
D) $(18,000)

Question 5

The issuance of common stock for cash is shown as a ________.

Accepted Answer

A) negative cash flow in the investing activities section of the statement of cash flows 
B) positive cash flow in the investing activities section of the statement of cash flows 
C) negative cash flow in the financing activities section of the statement of cash flows 
D) positive cash flow in the financing activities section of the statement of cash flows 
A) negative cash flow in the investing activities section of the statement of cash flows 
B) positive cash flow in the investing activities section of the statement of cash flows 
C) negative cash flow in the financing activities section of the statement of cash flows 
D) positive cash flow in the financing activities section of the statement of cash flows

Question 6

Which of the following is a cash outflow for a financing activity on the statement of cash flows?

Accepted Answer

A) purchase of long-term investments,such as the stock of another company 
B) loans made to another party 
C) purchase of treasury stock 
D) purchase of land 
A) purchase of long-term investments,such as the stock of another company 
B) loans made to another party 
C) purchase of treasury stock 
D) purchase of land

Question 7

The income statement and a partial balance sheet of Hart Alloy Company for the year ended December 31,2017 is presented below.Prepare the operating activities section of the statement of cash flows using the direct method.Accrued Liabilities relate to miscellaneous operating expenses.

Operating Expenses:

Accepted Answer

@#IMG-DLM& 
Cash Flows from Op

Question 8

Certified Auto Parts Company uses the indirect method to prepare its statement of cash flows.Refer to the following information for 2017:
Net cash provided by operating activities: $109,000
Net cash used for investing activities: $(115,500)
Net cash provided by financing activities: $18,000
If the cash balance at the beginning of the year was $13,200,what is the ending cash balance?

Accepted Answer

A) $24,700 
B) $11,500 
C) $13,200 
D) $6,500 
A) $24,700 
B) $11,500 
C) $13,200 
D) $6,500

Question 9

Investors who want to know the amount of cash a company has available for new opportunities,such as expanding into a new sales region,should analyze the company's ________.

Accepted Answer

A) free cash flow 
B) net cash flow from investing activities 
C) acid ratio 
D) earnings per share 
A) free cash flow 
B) net cash flow from investing activities 
C) acid ratio 
D) earnings per share

Question 10

Bright Eyes Paints Company uses the direct method for preparing its statement of cash flow.Bright Eyes reports the following information regarding 2017:
From the income statement:
Sales Revenues,$266,000
Cost of Goods Sold,$213,000
Operating Expenses,$36,000
Net Income $17,000
From the balance sheet:
 
Assume that there were no sales of long-term assets,no interest revenue,and no expenses other than the expenses shown above.Also,assume that Accounts Payable are for purchases of merchandise inventory only.What amount will be shown for the net cash flow from operating activities?

Accepted Answer

A) $61,700 
B) $23,600 
C) $17,000 
D) $10,400 
A) $61,700 
B) $23,600 
C) $17,000 
D) $10,400

Question 11

Walker,Inc.uses the indirect method to prepare the statement of cash flows.Refer to the following section of the comparative balance sheet:
   
The change in Accounts Receivable is shown as a negative cash flow in the adjustments to net income.

Accepted Answer

A) True 
 B)False

Question 12

The third section presented on the statement of cash flows is the non-cash operating activities section.

Accepted Answer

A) True 
 B)False

Question 13

The ________ section of the statement of cash flows includes increases and decreases in long-term assets.

Accepted Answer

A) investing activities 
B) financing activities 
C) operating activities 
D) non-cash operating activities 
A) investing activities 
B) financing activities 
C) operating activities 
D) non-cash operating activities

Question 14

Starfire Telescopes Company uses the indirect method to prepare the statement of cash flows.Refer to the following income statement:

Additional information provided by the company includes the following:
Current assets other than cash decreased by $25,000.
Current liabilities increased by $3,000.
Prepare the operating activities section of the statement of cash flows.

Accepted Answer

Cash Flows from Oper

Question 15

The statement of cash flows helps users ________.

Accepted Answer

A) predict future net income 
B) evaluate management decisions 
C) evaluate the company's earnings per share 
D) predict the growth of a company's assets 
A) predict future net income 
B) evaluate management decisions 
C) evaluate the company's earnings per share 
D) predict the growth of a company's assets

Question 16

Felix Skateboards Company uses the indirect method to prepare the statement of cash flows.Refer to the following income statement:
 
Additional information provided by the company includes the following:
1.Current assets,other than cash,increased by $21,000.
2.Current liabilities decreased by $1,500.
Compute the net cash provided by (used for)operating activities.

Accepted Answer

A) $26,200 
B) $40,200 
C) $34,700 
D) $12,500 
A) $26,200 
B) $40,200 
C) $34,700 
D) $12,500

Question 17

Partisan Services purchased 10 delivery vehicles by issuing a 10-year installment note payable for $320,000.This transaction is shown in the investing activities section of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 18

Kevin Woodworking Company is preparing its statement of cash flows using the indirect method.During the year,Kevin sold equipment for $7,490 cash.The net book value of the asset was $4,670.Which of the following statements is true?

Accepted Answer

A) The gain on sale of $2,820 is added back to net income in the operating activities section. 
B) The book value of the assets sold is shown as a negative cash flow in the investing activities section. 
C) The cash receipt of $7,490 is shown as a positive cash flow in the investing activities section. 
D) The gain on sale of $2,820 is shown as a positive cash flow in the financing activities section. 
A) The gain on sale of $2,820 is added back to net income in the operating activities section. 
B) The book value of the assets sold is shown as a negative cash flow in the investing activities section. 
C) The cash receipt of $7,490 is shown as a positive cash flow in the investing activities section. 
D) The gain on sale of $2,820 is shown as a positive cash flow in the financing activities section.

Question 19

Johnson Tires Company uses the indirect method to prepare the statement of cash flows.Refer to the following comparative balance sheet for Johnson Tires Company and complete the third column to show the increases or decreases.

Accepted Answer

@#IMG-DLM& 
 @#IMG-DLM& 
 @#IMG-DLM& 
Re

Question 20

Regarding the use of a spreadsheet for the preparation of the statement of cash flows,which of the following statements is incorrect?

Accepted Answer

A) The spreadsheet starts with the beginning balance sheet and concludes with the ending balance sheet. 
B) When companies face complex situations,a spreadsheet can help in preparing the statement of cash flows. 
C) The spreadsheet cannot be used for the direct method. 
D) Accountants can prepare the statement of cash flows directly from the lower part of the spreadsheet. 
A) The spreadsheet starts with the beginning balance sheet and concludes with the ending balance sheet. 
B) When companies face complex situations,a spreadsheet can help in preparing the statement of cash flows. 
C) The spreadsheet cannot be used for the direct method. 
D) Accountants can prepare the statement of cash flows directly from the lower part of the spreadsheet.

Which of the following items are included as an operating activity on the statement of cash flows,using the direct method?

Which of the following will be listed in the operating section of the statement of cash flows that is prepared using the indirect method?

The financing activities section of a statement prepared using the direct method includes changes in ________.

The issuance of common stock for cash is shown as a ________.

Which of the following is a cash outflow for a financing activity on the statement of cash flows?

Investors who want to know the amount of cash a company has available for new opportunities,such as expanding into a new sales region,should analyze the company's ________.

Walker,Inc.uses the indirect method to prepare the statement of cash flows.Refer to the following section of the comparative balance sheet: The change in Accounts Receivable is shown as a negative cash flow in the adjustments to net income.

The third section presented on the statement of cash flows is the non-cash operating activities section.

The ________ section of the statement of cash flows includes increases and decreases in long-term assets.

The statement of cash flows helps users ________.

Partisan Services purchased 10 delivery vehicles by issuing a 10-year installment note payable for $320,000.This transaction is shown in the investing activities section of the statement of cash flows.

Kevin Woodworking Company is preparing its statement of cash flows using the indirect method.During the year,Kevin sold equipment for $7,490 cash.The net book value of the asset was $4,670.Which of the following statements is true?

Johnson Tires Company uses the indirect method to prepare the statement of cash flows.Refer to the following comparative balance sheet for Johnson Tires Company and complete the third column to show the increases or decreases.

Regarding the use of a spreadsheet for the preparation of the statement of cash flows,which of the following statements is incorrect?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters

Exam 16: The Statement of Cash Flows

Which of the following items are included as an operating activity on the statement of cash flows,using the direct method?

Which of the following will be listed in the operating section of the statement of cash flows that is prepared using the indirect method?

The financing activities section of a statement prepared using the direct method includes changes in ________.

The issuance of common stock for cash is shown as a ________.

Which of the following is a cash outflow for a financing activity on the statement of cash flows?

Investors who want to know the amount of cash a company has available for new opportunities,such as expanding into a new sales region,should analyze the company's ________.

Walker,Inc.uses the indirect method to prepare the statement of cash flows.Refer to the following section of the comparative balance sheet: The change in Accounts Receivable is shown as a negative cash flow in the adjustments to net income.

The third section presented on the statement of cash flows is the non-cash operating activities section.

The ________ section of the statement of cash flows includes increases and decreases in long-term assets.

The statement of cash flows helps users ________.

Partisan Services purchased 10 delivery vehicles by issuing a 10-year installment note payable for $320,000.This transaction is shown in the investing activities section of the statement of cash flows.

Kevin Woodworking Company is preparing its statement of cash flows using the indirect method.During the year,Kevin sold equipment for $7,490 cash.The net book value of the asset was $4,670.Which of the following statements is true?

Johnson Tires Company uses the indirect method to prepare the statement of cash flows.Refer to the following comparative balance sheet for Johnson Tires Company and complete the third column to show the increases or decreases.

Regarding the use of a spreadsheet for the preparation of the statement of cash flows,which of the following statements is incorrect?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters