Question 1

A successful business must generate most of its cash from:

Accepted Answer

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

Question 2

Which statement about the statement of cash flows is FALSE?

Accepted Answer

A) The statement of cash flows is based on information from several financial statements. 
B) The statement of cash flows is based on information from a company's income statement only. 
C) The change in the Cash account on the comparative balance sheets is the check figure for the statement of cash flows. 
D) The indirect method of preparing the statement of cash flows is used by the vast majority of companies in the United States. 
A) The statement of cash flows is based on information from several financial statements. 
B) The statement of cash flows is based on information from a company's income statement only. 
C) The change in the Cash account on the comparative balance sheets is the check figure for the statement of cash flows. 
D) The indirect method of preparing the statement of cash flows is used by the vast majority of companies in the United States.

Question 3

An example of a cash equivalent is a money-market account.

Accepted Answer

A) True 
 B)False

Question 4

During the year,Chappel Engineering Corporation has operating expenses of $50,000.There was an increase in prepaid expenses of $4000 and an increase in accrued liabilities of $6000.What were Chappel's cash payments for operating expenses?

Accepted Answer

A) $44,000 
B) $48,000 
C) $54,000 
D) $56,000 
A) $44,000 
B) $48,000 
C) $54,000 
D) $56,000

Question 5

Which of the following would be reported on a statement of cash flows as a financing activity?

Accepted Answer

A) Sale of equipment 
B) Amortization expense 
C) Collection of notes receivable 
D) Purchase of treasury stock 
A) Sale of equipment 
B) Amortization expense 
C) Collection of notes receivable 
D) Purchase of treasury stock

Question 6

Under the indirect method of preparing the operating section of the statement of cash flows,net cash provided by operating activities is $197,000.If the direct method of preparing the operating section of the statement of cash flows was used:

Accepted Answer

A) net cash provided by operating activities would be the same,$197,000. 
B) net cash provided by operating activities would be more than $197,000. 
C) net cash provided by operating activities would be less than $197,000. 
D) net cash provided by financing and investing activities would equal $197,000. 
A) net cash provided by operating activities would be the same,$197,000. 
B) net cash provided by operating activities would be more than $197,000. 
C) net cash provided by operating activities would be less than $197,000. 
D) net cash provided by financing and investing activities would equal $197,000.

Question 7

In 2019,Forever Young,Inc.sold land for $130,000 cash,purchased equipment for $19,000 cash and issued bonds for $100,000 cash.The Net cash provided by investing activities is:

Accepted Answer

A) $111,000. 
B) $149,000. 
C) $211,000. 
D) $230,000. 
A) $111,000. 
B) $149,000. 
C) $211,000. 
D) $230,000.

Question 8

Which of the following would be reported on a statement of cash flows as an investing activity?

Accepted Answer

A) depreciation expense 
B) purchase of treasury stock 
C) sale of equipment for cash 
D) payment of cash dividends 
A) depreciation expense 
B) purchase of treasury stock 
C) sale of equipment for cash 
D) payment of cash dividends

Question 9

A good predictor of future cash flows includes:

Accepted Answer

A) net income in past year. 
B) net income in current year. 
C) past cash receipts and past cash payments. 
D) cash receipts and cash payments in the current year. 
A) net income in past year. 
B) net income in current year. 
C) past cash receipts and past cash payments. 
D) cash receipts and cash payments in the current year.

Question 10

Examples of financing activities on a statement of cash flows do NOT include:

Accepted Answer

A) issuing stock. 
B) borrowing money. 
C) buying treasury stock. 
D) declaring stock dividends. 
A) issuing stock. 
B) borrowing money. 
C) buying treasury stock. 
D) declaring stock dividends.

Question 11

Under the indirect method to prepare the statement of cash flows,depletion expense must be subtracted from net income when calculating Net cash provided by operating activities.

Accepted Answer

A) True 
 B)False

Question 12

The FASB and IASB prefer the direct method of reporting operating cash flows on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 13

Under the indirect method of preparing a statement of cash flows,amortization expense for the current period is:

Accepted Answer

A) added in the investing activities section. 
B) subtracted in the investing activities section. 
C) added in the financing activities section. 
D) added in the operating activities section. 
A) added in the investing activities section. 
B) subtracted in the investing activities section. 
C) added in the financing activities section. 
D) added in the operating activities section.

Question 14

Cash received from the issuance of bonds would be reported on a statement of cash flows under:

Accepted Answer

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

Question 15

Free cash flow is the amount of cash available from investing activities after paying for planned investments in plant assets.

Accepted Answer

A) True 
 B)False

Question 16

On January 1,2019,the Bonds Payable account has a balance of $730,000.On December 31,2019,the Bonds Payable account has a balance of $820,000.During 2019,one bond of $9000 was retired.No discounts or premiums were amortized in 2019.What amount of new bonds were issued in 2019?

Accepted Answer

A) $0 
B) $81,000 
C) $90,000 
D) $99,000 
A) $0 
B) $81,000 
C) $90,000 
D) $99,000

Question 17

Where would income taxes paid appear on the statement of cash flows prepared by using the direct method?

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

Question 18

The statement of cash flows does NOT report:

Accepted Answer

A) cash payments in the current year. 
B) cash receipts in the current year. 
C) noncash investing and financing activities. 
D) revenues and expenses for the current year. 
A) cash payments in the current year. 
B) cash receipts in the current year. 
C) noncash investing and financing activities. 
D) revenues and expenses for the current year.

Question 19

Under the indirect method of preparing the statement of cash flows,the starting point to determine Net cash provided by operating activities is:

Accepted Answer

A) the beginning cash balance. 
B) the ending cash balance. 
C) net income. 
D) sales. 
A) the beginning cash balance. 
B) the ending cash balance. 
C) net income. 
D) sales.

Question 20

Under the direct method of preparing the statement of cash flows,the computation of payments to suppliers includes:

Accepted Answer

A) payments for inventory only. 
B) payments for operating expenses only. 
C) payments for inventory and operating expenses (excluding employee's wages). 
D) payments for inventory,operating expenses,interest expense and income taxes. 
A) payments for inventory only. 
B) payments for operating expenses only. 
C) payments for inventory and operating expenses (excluding employee's wages). 
D) payments for inventory,operating expenses,interest expense and income taxes.

A successful business must generate most of its cash from:

Which statement about the statement of cash flows is FALSE?

An example of a cash equivalent is a money-market account.

During the year,Chappel Engineering Corporation has operating expenses of $50,000.There was an increase in prepaid expenses of $4000 and an increase in accrued liabilities of $6000.What were Chappel's cash payments for operating expenses?

Which of the following would be reported on a statement of cash flows as a financing activity?

Under the indirect method of preparing the operating section of the statement of cash flows,net cash provided by operating activities is $197,000.If the direct method of preparing the operating section of the statement of cash flows was used:

In 2019,Forever Young,Inc.sold land for $130,000 cash,purchased equipment for $19,000 cash and issued bonds for $100,000 cash.The Net cash provided by investing activities is:

Which of the following would be reported on a statement of cash flows as an investing activity?

A good predictor of future cash flows includes:

Examples of financing activities on a statement of cash flows do NOT include:

Under the indirect method to prepare the statement of cash flows,depletion expense must be subtracted from net income when calculating Net cash provided by operating activities.

The FASB and IASB prefer the direct method of reporting operating cash flows on the statement of cash flows.

Under the indirect method of preparing a statement of cash flows,amortization expense for the current period is:

Cash received from the issuance of bonds would be reported on a statement of cash flows under:

Free cash flow is the amount of cash available from investing activities after paying for planned investments in plant assets.

On January 1,2019,the Bonds Payable account has a balance of $730,000.On December 31,2019,the Bonds Payable account has a balance of $820,000.During 2019,one bond of $9000 was retired.No discounts or premiums were amortized in 2019.What amount of new bonds were issued in 2019?

Where would income taxes paid appear on the statement of cash flows prepared by using the direct method?

The statement of cash flows does NOT report:

Under the indirect method of preparing the statement of cash flows,the starting point to determine Net cash provided by operating activities is:

Under the direct method of preparing the statement of cash flows,the computation of payments to suppliers includes:

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

A successful business must generate most of its cash from:

Which statement about the statement of cash flows is FALSE?

An example of a cash equivalent is a money-market account.

During the year,Chappel Engineering Corporation has operating expenses of $50,000.There was an increase in prepaid expenses of $4000 and an increase in accrued liabilities of $6000.What were Chappel's cash payments for operating expenses?

Which of the following would be reported on a statement of cash flows as a financing activity?

Under the indirect method of preparing the operating section of the statement of cash flows,net cash provided by operating activities is $197,000.If the direct method of preparing the operating section of the statement of cash flows was used:

In 2019,Forever Young,Inc.sold land for $130,000 cash,purchased equipment for $19,000 cash and issued bonds for $100,000 cash.The Net cash provided by investing activities is:

Which of the following would be reported on a statement of cash flows as an investing activity?

A good predictor of future cash flows includes:

Examples of financing activities on a statement of cash flows do NOT include:

Under the indirect method to prepare the statement of cash flows,depletion expense must be subtracted from net income when calculating Net cash provided by operating activities.

The FASB and IASB prefer the direct method of reporting operating cash flows on the statement of cash flows.

Under the indirect method of preparing a statement of cash flows,amortization expense for the current period is:

Cash received from the issuance of bonds would be reported on a statement of cash flows under:

Free cash flow is the amount of cash available from investing activities after paying for planned investments in plant assets.

On January 1,2019,the Bonds Payable account has a balance of $730,000.On December 31,2019,the Bonds Payable account has a balance of $820,000.During 2019,one bond of $9000 was retired.No discounts or premiums were amortized in 2019.What amount of new bonds were issued in 2019?

Where would income taxes paid appear on the statement of cash flows prepared by using the direct method?

The statement of cash flows does NOT report:

Under the indirect method of preparing the statement of cash flows,the starting point to determine Net cash provided by operating activities is:

Under the direct method of preparing the statement of cash flows,the computation of payments to suppliers includes:

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