Question 1

Which of the following would NOT be reported in the operating activities section of a statement of cash flows using the direct method?

Accepted Answer

A) cash paid for income taxes 
B) interest received on notes receivable 
C) loss on sale of equipment 
D) payments to suppliers 
A) cash paid for income taxes 
B) interest received on notes receivable 
C) loss on sale of equipment 
D) payments to suppliers

Question 2

On January 1,2019,plant assets,net are $190,000 and on December 31,2019,plant assets,net are $300,000.Depreciation expense for the year is $100,000.No plant assets were sold or exchanged during the year.What is the cost of the plant assets acquired during the year?

Accepted Answer

A) $0 
B) $90,000 
C) $110,000 
D) $210,000 
A) $0 
B) $90,000 
C) $110,000 
D) $210,000

Question 3

Serfleck Company reports the following data for the year ending December 31,2019:   There were no retirements of common stock in 2019.On the statement of cash flows (indirect method),what is the net cash provided by financing activities for the year ending December 31,2019?

Accepted Answer

A) $31,000 
B) $39,000 
C) $43,000 
D) $35,000 
A) $31,000 
B) $39,000 
C) $43,000 
D) $35,000

Question 4

Under the direct method of preparing the statement of cash flows,which statement is CORRECT regarding the method of computing cash payments to suppliers for inventory?

Accepted Answer

A) Cost of goods sold less a decrease in inventory plus an increase in accounts payable. 
B) Cost of goods sold plus an increase in inventory less an increase in accounts payable. 
C) Cost of goods sold plus an increase in inventory plus an increase in accounts payable. 
D) Cost of goods sold plus a decrease in inventory plus an increase in accounts payable. 
A) Cost of goods sold less a decrease in inventory plus an increase in accounts payable. 
B) Cost of goods sold plus an increase in inventory less an increase in accounts payable. 
C) Cost of goods sold plus an increase in inventory plus an increase in accounts payable. 
D) Cost of goods sold plus a decrease in inventory plus an increase in accounts payable.

Question 5

The statement of cash flows explains why the cash balance changed over a period of time.

Accepted Answer

A) True 
 B)False

Question 6

Under the direct method of preparing the operating section of the statement of cash flows,net cash provided by financing activities is $558,000.If the indirect method of preparing the statement of cash flows was used:

Accepted Answer

A) net cash provided by financing activities would be less than $558,000. 
B) net cash provided by financing activities would be more than $558,000. 
C) net cash provided by financing activities would be the same,$558,000. 
D) net cash provided by operating activities would equal $558,000. 
A) net cash provided by financing activities would be less than $558,000. 
B) net cash provided by financing activities would be more than $558,000. 
C) net cash provided by financing activities would be the same,$558,000. 
D) net cash provided by operating activities would equal $558,000.

Question 7

Scheeler Company has the following comparative balance sheet data available:
   Additional information:
1.The company reports net income of $100,000 and depreciation expense of $20,000 for the year ending December 31,2020.
2.Dividends declared and paid in 2020,$70,000.
3.Equipment with a cost of $20,000 and accumulated depreciation of $10,000 was sold for $3,000.
4.New equipment was purchased for cash.
5.No common stock was retired during 2020.
Using the indirect method,prepare the statement of cash flows for the year ending December 31,2020.

Accepted Answer

The answer of Scheeler Company has the following comparative balance...

Question 8

The change in cash on the comparative balance sheets is the "check figure" for the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 9

On January 1,2019,plant assets,net are $190,000.On December 31,2019,plant assets,net are $290,000.Depreciation expense for the year is $20,000.During the year,plant assets were acquired for $155,000 with cash.There is a Gain on sale of plant asset of $10,000.What are the cash proceeds from the sale of the plant asset?

Accepted Answer

A) $0 
B) $25,000 
C) $35,000 
D) $45,000 
A) $0 
B) $25,000 
C) $35,000 
D) $45,000

Question 10

If $380,000 of bonds are issued during the year and $130,000 of bonds are retired during the year,the statement of cash flows (indirect method)will show a(n):

Accepted Answer

A) net gain on retirement of bonds of $250,000 in the financing activities section. 
B) increase in cash of $380,000 in the financing activities section and a decrease in cash of $130,000 in the financing activities section. 
C) net increase in cash of $250,000 in the operating activities section. 
D) net decrease in cash of $250,000 in the operating activities section. 
A) net gain on retirement of bonds of $250,000 in the financing activities section. 
B) increase in cash of $380,000 in the financing activities section and a decrease in cash of $130,000 in the financing activities section. 
C) net increase in cash of $250,000 in the operating activities section. 
D) net decrease in cash of $250,000 in the operating activities section.

Question 11

Interest expense paid in cash is a cash outflow from operating activities on the statement of cash flows prepared under the indirect method as it is part of net income.

Accepted Answer

A) True 
 B)False

Question 12

Which of the three types of activities reported on the statement of cash flows is the MOST critical for a company's long-term survival?

Accepted Answer

A) investing activities 
B) operating activities 
C) financing activities 
D) noncash investing and financing activities 
A) investing activities 
B) operating activities 
C) financing activities 
D) noncash investing and financing activities

Question 13

The statement of cash flows provides information about:

Accepted Answer

A) a company's ability to pay interest and dividends. 
B) a company's future cash flows. 
C) decisions made by a company's management. 
D) all of the above. 
A) a company's ability to pay interest and dividends. 
B) a company's future cash flows. 
C) decisions made by a company's management. 
D) all of the above.

Question 14

The sale of land for cash would be classified as a cash inflow from an operating activity on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 15

Using the indirect method to prepare the statement of cash flows,an increase in accounts receivable is subtracted from net income in calculating Net cash provided by operating activities.

Accepted Answer

A) True 
 B)False

Question 16

On the statement of cash flows,cash used for financing activities include:

Accepted Answer

A) issuing stock for property. 
B) sale of treasury stock. 
C) payment of notes payable. 
D) purchase of plant assets. 
A) issuing stock for property. 
B) sale of treasury stock. 
C) payment of notes payable. 
D) purchase of plant assets.

Question 17

Mary Andrews,Inc.had the following transactions:   On a statement of cash flows prepared under the indirect method,Net cash provided by investing activities is:

Accepted Answer

A) $469,000. 
B) $539,000. 
C) $522,000. 
D) $570,000. 
A) $469,000. 
B) $539,000. 
C) $522,000. 
D) $570,000.

Question 18

In 2019,Chen Corporation purchased treasury stock with a cost of $49,000.During the year,the company declared and paid dividends of $8000 and issued bonds payable for $1,100,000.Net cash provided by financing activities for 2019 is:

Accepted Answer

A) $1,043,000. 
B) $1,051,000. 
C) $1,092,000. 
D) $1,100,000. 
A) $1,043,000. 
B) $1,051,000. 
C) $1,092,000. 
D) $1,100,000.

Question 19

The statement of cash flows is designed to fulfill all the following purposes EXCEPT to:

Accepted Answer

A) show the relationship of net income to changes in the company's cash. 
B) assess the collectability of accounts receivable. 
C) evaluate management decisions. 
D) help predict future cash flows. 
A) show the relationship of net income to changes in the company's cash. 
B) assess the collectability of accounts receivable. 
C) evaluate management decisions. 
D) help predict future cash flows.

Question 20

The receipt of interest on loans would be reported on a statement of cash flows,prepared by the direct method,under:

Accepted Answer

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

Which of the following would NOT be reported in the operating activities section of a statement of cash flows using the direct method?

On January 1,2019,plant assets,net are $190,000 and on December 31,2019,plant assets,net are $300,000.Depreciation expense for the year is $100,000.No plant assets were sold or exchanged during the year.What is the cost of the plant assets acquired during the year?

Serfleck Company reports the following data for the year ending December 31,2019: There were no retirements of common stock in 2019.On the statement of cash flows (indirect method),what is the net cash provided by financing activities for the year ending December 31,2019?

Under the direct method of preparing the statement of cash flows,which statement is CORRECT regarding the method of computing cash payments to suppliers for inventory?

The statement of cash flows explains why the cash balance changed over a period of time.

Under the direct method of preparing the operating section of the statement of cash flows,net cash provided by financing activities is $558,000.If the indirect method of preparing the statement of cash flows was used:

The change in cash on the comparative balance sheets is the "check figure" for the statement of cash flows.

If $380,000 of bonds are issued during the year and $130,000 of bonds are retired during the year,the statement of cash flows (indirect method)will show a(n):

Interest expense paid in cash is a cash outflow from operating activities on the statement of cash flows prepared under the indirect method as it is part of net income.

Which of the three types of activities reported on the statement of cash flows is the MOST critical for a company's long-term survival?

The statement of cash flows provides information about:

The sale of land for cash would be classified as a cash inflow from an operating activity on the statement of cash flows.

Using the indirect method to prepare the statement of cash flows,an increase in accounts receivable is subtracted from net income in calculating Net cash provided by operating activities.

On the statement of cash flows,cash used for financing activities include:

Mary Andrews,Inc.had the following transactions: On a statement of cash flows prepared under the indirect method,Net cash provided by investing activities is:

In 2019,Chen Corporation purchased treasury stock with a cost of $49,000.During the year,the company declared and paid dividends of $8000 and issued bonds payable for $1,100,000.Net cash provided by financing activities for 2019 is:

The statement of cash flows is designed to fulfill all the following purposes EXCEPT to:

The receipt of interest on loans would be reported on a statement of cash flows,prepared by the direct method,under:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

Financial Statement Analysis

Investments

Time Value of Money

Filters

Exam 11: The Statement of Cash Flows

Which of the following would NOT be reported in the operating activities section of a statement of cash flows using the direct method?

On January 1,2019,plant assets,net are $190,000 and on December 31,2019,plant assets,net are $300,000.Depreciation expense for the year is $100,000.No plant assets were sold or exchanged during the year.What is the cost of the plant assets acquired during the year?

Serfleck Company reports the following data for the year ending December 31,2019: There were no retirements of common stock in 2019.On the statement of cash flows (indirect method),what is the net cash provided by financing activities for the year ending December 31,2019?

Under the direct method of preparing the statement of cash flows,which statement is CORRECT regarding the method of computing cash payments to suppliers for inventory?

The statement of cash flows explains why the cash balance changed over a period of time.

Under the direct method of preparing the operating section of the statement of cash flows,net cash provided by financing activities is $558,000.If the indirect method of preparing the statement of cash flows was used:

The change in cash on the comparative balance sheets is the "check figure" for the statement of cash flows.

If $380,000 of bonds are issued during the year and $130,000 of bonds are retired during the year,the statement of cash flows (indirect method)will show a(n):

Interest expense paid in cash is a cash outflow from operating activities on the statement of cash flows prepared under the indirect method as it is part of net income.

Which of the three types of activities reported on the statement of cash flows is the MOST critical for a company's long-term survival?

The statement of cash flows provides information about:

The sale of land for cash would be classified as a cash inflow from an operating activity on the statement of cash flows.

Using the indirect method to prepare the statement of cash flows,an increase in accounts receivable is subtracted from net income in calculating Net cash provided by operating activities.

On the statement of cash flows,cash used for financing activities include:

Mary Andrews,Inc.had the following transactions: On a statement of cash flows prepared under the indirect method,Net cash provided by investing activities is:

In 2019,Chen Corporation purchased treasury stock with a cost of $49,000.During the year,the company declared and paid dividends of $8000 and issued bonds payable for $1,100,000.Net cash provided by financing activities for 2019 is:

The statement of cash flows is designed to fulfill all the following purposes EXCEPT to:

The receipt of interest on loans would be reported on a statement of cash flows,prepared by the direct method,under:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

Financial Statement Analysis

Investments

Time Value of Money

Filters