Question 1

Use the following major cash flow activities to classify the activities listed below:
-Paid off long-term debt

Accepted Answer

A) Operating Activity, Source of Cash 
B) Operating Activity, Use of Cash 
C) Investing Activity, Source of Cash 
D) Investing Activity, Use of Cash 
E) Financing Activity, Source of Cash
F)Financing Activity, Use of Cash
G)Non-cash Investing & Financing Activity 
A) Operating Activity, Source of Cash 
B) Operating Activity, Use of Cash 
C) Investing Activity, Source of Cash 
D) Investing Activity, Use of Cash 
E) Financing Activity, Source of Cash
F)Financing Activity, Use of Cash
G)Non-cash Investing & Financing Activity

Question 2

For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the indirect method.
-Acquisition of land in exchange for common stock.

Accepted Answer

A) Added to net income 
B) Deducted from net income 
C) Cash outflow--investing activity 
D) Cash inflow--investing activity 
E) Cash outflow--financing activity
F)Cash inflow--financing activity
G)significant noncash investing and financing activity 
A) Added to net income 
B) Deducted from net income 
C) Cash outflow--investing activity 
D) Cash inflow--investing activity 
E) Cash outflow--financing activity
F)Cash inflow--financing activity
G)significant noncash investing and financing activity

Question 3

The Laurel Company reported the following data for last year:  
Based solely on this information, the net cash flows from financing activities on the statement of cash flows would be

Accepted Answer

A)  $2,000. 
B)  $(30,000). 
C)  $(60,000). 
D)  $(8,000). 
A)  $2,000. 
B)  $(30,000). 
C)  $(60,000). 
D)  $(8,000).

Question 4

Which of the following influences the decision of using the direct or the indirect method on a statement of cash flows?

Accepted Answer

A)  Operating activities only 
B)  Research activities only 
C)  Financing activities only 
D)  All of these 
A)  Operating activities only 
B)  Research activities only 
C)  Financing activities only 
D)  All of these

Question 5

Upon review of Susan's Statement of Cash Flows, the following was noted: 
 From this information, the most likely explanation is that Susan is

Accepted Answer

A)  using cash from operations and selling long-term assets to pay back debt. 
B)  using cash from operations and borrowing to purchase long-term assets. 
C)  using its profits to expand growth. 
D)  using cash from investors to provide for operations. 
A)  using cash from operations and selling long-term assets to pay back debt. 
B)  using cash from operations and borrowing to purchase long-term assets. 
C)  using its profits to expand growth. 
D)  using cash from investors to provide for operations.

Question 6

Which of the following would not be an adjustment to net income using the indirect method?

Accepted Answer

A)  depreciation expense 
B)  an increase in prepaid expenses 
C)  amortization expense 
D)  an increase in land 
A)  depreciation expense 
B)  an increase in prepaid expenses 
C)  amortization expense 
D)  an increase in land

Question 7

The direct method of reporting cash flows from operating activities involves reporting major classes of cash receipts and cash payments.

Accepted Answer

A) True 
 B)False

Question 8

Master Company's net income last year was $88,000 and cash dividends declared and paid to the company stockholders was $60,000.Changes in selected balance sheet accounts for the year appear below:

- The net cash flows from financing activities last year was

Accepted Answer

A)  $80,000. 
B)  $(80,000). 
C)  $20,000. 
D)  $(20,000). 
A)  $80,000. 
B)  $(80,000). 
C)  $20,000. 
D)  $(20,000).

Question 9

For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the indirect method.
-Proceeds from sale of equipment at book value.

Accepted Answer

A) Added to net income 
B) Deducted from net income 
C) Cash outflow--investing activity 
D) Cash inflow--investing activity 
E) Cash outflow--financing activity
F)Cash inflow--financing activity
G)significant noncash investing and financing activity 
A) Added to net income 
B) Deducted from net income 
C) Cash outflow--investing activity 
D) Cash inflow--investing activity 
E) Cash outflow--financing activity
F)Cash inflow--financing activity
G)significant noncash investing and financing activity

Question 10

The Star City reported net loss of $50,000.Cash from operating activities

Accepted Answer

A)  will be more than $50,000. 
B)  will be less than $50,000. 
C)  will be equal to $50,000. 
D)  cannot be determined without more information. 
A)  will be more than $50,000. 
B)  will be less than $50,000. 
C)  will be equal to $50,000. 
D)  cannot be determined without more information.

Question 11

If a gain of $25,000 is incurred in selling (for cash) office equipment having a book value of $100,000, the total amount reported in the cash flows from the investing activities section of the statement of cash flows is

Accepted Answer

A)  $75,000. 
B)  $100,000. 
C)  $125,000. 
D)  $25,000. 
A)  $75,000. 
B)  $100,000. 
C)  $125,000. 
D)  $25,000.

Question 12

For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the indirect method.
-Decrease in accounts receivable during a period.

Accepted Answer

A) Added to net income 
B) Deducted from net income 
C) Cash outflow--investing activity 
D) Cash inflow--investing activity 
E) Cash outflow--financing activity
F)Cash inflow--financing activity
G)significant noncash investing and financing activity 
A) Added to net income 
B) Deducted from net income 
C) Cash outflow--investing activity 
D) Cash inflow--investing activity 
E) Cash outflow--financing activity
F)Cash inflow--financing activity
G)significant noncash investing and financing activity

Question 13

Smith and Company reported net income for the current year.Which of the following business transactions would cause cash from operating activities to be higher than the amount of net income?

Accepted Answer

A)  Cash dividends were paid to stockholders during the year. 
B)  Depreciation expense was recorded for the year. 
C)  A bank loan was repaid during the year. 
D)  Equipment was purchased for cash during the year. 
A)  Cash dividends were paid to stockholders during the year. 
B)  Depreciation expense was recorded for the year. 
C)  A bank loan was repaid during the year. 
D)  Equipment was purchased for cash during the year.

Question 14

Last year, Amethyst Company's cash account decreased by $20,000.Net cash flow from investing activities were $23,000.Net cash flow from financing activities were ($12,000).On the statement of cash flows, net cash flow from operating activities were:

Accepted Answer

A)  ($31,000). 
B)  ($23,000). 
C)  ($18,000). 
D)  ($47,000). 
A)  ($31,000). 
B)  ($23,000). 
C)  ($18,000). 
D)  ($47,000).

Question 15

If a firm uses the direct method for reporting operating activities on the statement of cash flows, it must present a separate schedule which reconciles net income to net cash from operating activities.

Accepted Answer

A) True 
 B)False

Question 16

The statement of cash flows does not report the

Accepted Answer

A)  sources of cash in the current period. 
B)  uses of cash in the current period. 
C)  amount of checks outstanding at the end of the period. 
D)  change in the cash balance for the current period. 
A)  sources of cash in the current period. 
B)  uses of cash in the current period. 
C)  amount of checks outstanding at the end of the period. 
D)  change in the cash balance for the current period.

Question 17

The two approaches to calculating operating cash flows are the _______________ and the _____________.

Accepted Answer

indirect method; dir

Question 18

The acquisition of land by issuing common stock is

Accepted Answer

A)  only reported if the statement of cash flows is prepared using the direct method. 
B)  a cash transaction that is reported in the investing section in the body of the statement of cash flows. 
C)  a noncash transaction that is reported in the operating section in the body of the statement of cash flows. 
D)  a noncash transaction that is disclosed in a supplementary schedule attached to the statement of cash flows. 
A)  only reported if the statement of cash flows is prepared using the direct method. 
B)  a cash transaction that is reported in the investing section in the body of the statement of cash flows. 
C)  a noncash transaction that is reported in the operating section in the body of the statement of cash flows. 
D)  a noncash transaction that is disclosed in a supplementary schedule attached to the statement of cash flows.

Question 19

The difference between the indirect and direct methods of preparing a statement of cash flows is reflected in the:

Accepted Answer

A)  manufacturing activities section. 
B)  investing activities section. 
C)  operating activities section. 
D)  selling activities section. 
A)  manufacturing activities section. 
B)  investing activities section. 
C)  operating activities section. 
D)  selling activities section.

Question 20

As transactions increase in number and complexity, a ____________ becomes a useful aid in preparing the statement of cash flows.

Accepted Answer

The answer of As transactions increase in number and complexity,...

Use the following major cash flow activities to classify the activities listed below: -Paid off long-term debt

For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the indirect method. -Acquisition of land in exchange for common stock.

The Laurel Company reported the following data for last year: Based solely on this information, the net cash flows from financing activities on the statement of cash flows would be

Which of the following influences the decision of using the direct or the indirect method on a statement of cash flows?

Upon review of Susan's Statement of Cash Flows, the following was noted: From this information, the most likely explanation is that Susan is

Which of the following would not be an adjustment to net income using the indirect method?

The direct method of reporting cash flows from operating activities involves reporting major classes of cash receipts and cash payments.

Master Company's net income last year was $88,000 and cash dividends declared and paid to the company stockholders was $60,000.Changes in selected balance sheet accounts for the year appear below: - The net cash flows from financing activities last year was

For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the indirect method. -Proceeds from sale of equipment at book value.

The Star City reported net loss of $50,000.Cash from operating activities

If a gain of $25,000 is incurred in selling (for cash) office equipment having a book value of $100,000, the total amount reported in the cash flows from the investing activities section of the statement of cash flows is

For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the indirect method. -Decrease in accounts receivable during a period.

Smith and Company reported net income for the current year.Which of the following business transactions would cause cash from operating activities to be higher than the amount of net income?

Last year, Amethyst Company's cash account decreased by $20,000.Net cash flow from investing activities were $23,000.Net cash flow from financing activities were ($12,000).On the statement of cash flows, net cash flow from operating activities were:

If a firm uses the direct method for reporting operating activities on the statement of cash flows, it must present a separate schedule which reconciles net income to net cash from operating activities.

The statement of cash flows does not report the

The two approaches to calculating operating cash flows are the ___ and the _.

The acquisition of land by issuing common stock is

The difference between the indirect and direct methods of preparing a statement of cash flows is reflected in the:

As transactions increase in number and complexity, a ____________ becomes a useful aid in preparing the statement of cash flows.

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior, Cost Forecasting, and Segmented Income Statements

Job-Order Costing and Normal Cost Overhead Application

Activity-Based Costing and Management

Process Costing

Cost-Volume-Profit Analysis

Tactical Decision-Making and Relevant Costing

Profit Planning and Flexible Budgets

Standard Costing and Variance Analysis

Performance Evaluation and Decentralization

Capital Investment Decisions

Emerging Topics in Managerial Accounting: Sustainability, Quality Cost, Lean Accounting, International Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting

Financial Statement Analysis

Filters

Exam 14: Statement of Cash Flows

Use the following major cash flow activities to classify the activities listed below: -Paid off long-term debt

For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the indirect method. -Acquisition of land in exchange for common stock.

The Laurel Company reported the following data for last year: Based solely on this information, the net cash flows from financing activities on the statement of cash flows would be

Which of the following influences the decision of using the direct or the indirect method on a statement of cash flows?

Upon review of Susan's Statement of Cash Flows, the following was noted: From this information, the most likely explanation is that Susan is

Which of the following would not be an adjustment to net income using the indirect method?

The direct method of reporting cash flows from operating activities involves reporting major classes of cash receipts and cash payments.

Master Company's net income last year was $88,000 and cash dividends declared and paid to the company stockholders was $60,000.Changes in selected balance sheet accounts for the year appear below: - The net cash flows from financing activities last year was

For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the indirect method. -Proceeds from sale of equipment at book value.

The Star City reported net loss of $50,000.Cash from operating activities

If a gain of $25,000 is incurred in selling (for cash) office equipment having a book value of $100,000, the total amount reported in the cash flows from the investing activities section of the statement of cash flows is

For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the indirect method. -Decrease in accounts receivable during a period.

Smith and Company reported net income for the current year.Which of the following business transactions would cause cash from operating activities to be higher than the amount of net income?

Last year, Amethyst Company's cash account decreased by $20,000.Net cash flow from investing activities were $23,000.Net cash flow from financing activities were ($12,000).On the statement of cash flows, net cash flow from operating activities were:

If a firm uses the direct method for reporting operating activities on the statement of cash flows, it must present a separate schedule which reconciles net income to net cash from operating activities.

The statement of cash flows does not report the

The two approaches to calculating operating cash flows are the _______________ and the _____________.

The acquisition of land by issuing common stock is

The difference between the indirect and direct methods of preparing a statement of cash flows is reflected in the:

As transactions increase in number and complexity, a ____________ becomes a useful aid in preparing the statement of cash flows.

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior, Cost Forecasting, and Segmented Income Statements

Job-Order Costing and Normal Cost Overhead Application

Activity-Based Costing and Management

Process Costing

Cost-Volume-Profit Analysis

Tactical Decision-Making and Relevant Costing

Profit Planning and Flexible Budgets

Standard Costing and Variance Analysis

Performance Evaluation and Decentralization

Capital Investment Decisions

Emerging Topics in Managerial Accounting: Sustainability, Quality Cost, Lean Accounting, International Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting

Financial Statement Analysis

Filters

The two approaches to calculating operating cash flows are the ___ and the _.