Question 1

The statement of cash flows is presented for a period of time.

Accepted Answer

A) True 
 B)False

Question 2

When converting net income to net cash provided by operating activities on the statement of cash flows,indirect method,which of the following is NOT added to net income?

Accepted Answer

A) gain on sale of land 
B) decrease in inventory 
C) decrease in accounts receivable 
D) depreciation expense 
A) gain on sale of land 
B) decrease in inventory 
C) decrease in accounts receivable 
D) depreciation expense

Question 3

All of the following may appear as an adjustment of net income when preparing the statement of cash flows using the indirect method EXCEPT:

Accepted Answer

A) payment of cash dividends. 
B) depreciation expense. 
C) loss on sale of long-term assets. 
D) an increase in accounts payable. 
A) payment of cash dividends. 
B) depreciation expense. 
C) loss on sale of long-term assets. 
D) an increase in accounts payable.

Question 4

Which financial statements cover a period of time?

Accepted Answer

A) Income Statement only 
B) Income Statement and Statement of Stockholders' Equity 
C) Income Statement,Statement of Stockholders' Equity and Statement of Cash Flows 
D) Income Statement,Statement of Stockholders' Equity,Statement of Cash Flows and Balance Sheet 
A) Income Statement only 
B) Income Statement and Statement of Stockholders' Equity 
C) Income Statement,Statement of Stockholders' Equity and Statement of Cash Flows 
D) Income Statement,Statement of Stockholders' Equity,Statement of Cash Flows and Balance Sheet

Question 5

Income tax expense is $47,000 for the current year.Income tax payable increased $3000 during the year.Interest payable increased $4000 during the year.What is the cash paid for income taxes?

Accepted Answer

A) $44,000 
B) $47,000 
C) $50,000 
D) $51,000 
A) $44,000 
B) $47,000 
C) $50,000 
D) $51,000

Question 6

The income statement and the statement of cash flows often paint the same picture of the company.

Accepted Answer

A) True 
 B)False

Question 7

Purchases of treasury stock would be reported on a statement of cash flows as:

Accepted Answer

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

Question 8

A company purchased a parcel of land using a long-term note payable.Using the direct method,where is this transaction reported on the statement of cash flows?

Accepted Answer

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

Question 9

Interest expense for the current year is $310,000.Interest payable increased $55,000 during the year.Interest receivable increased $11,000 during the year.Interest expense includes $47,000 for the amortization of discount.What is the cash paid for interest?

Accepted Answer

A) $208,000 
B) $219,000 
C) $310,000 
D) $263,000 
A) $208,000 
B) $219,000 
C) $310,000 
D) $263,000

Question 10

Because income and cash flow usually move together,net income and cash flow also move together.

Accepted Answer

A) True 
 B)False

Question 11

Using the indirect method,the operating section of the Statement of Cash Flows begins with Net income and is followed by Adjustments to reconcile net income to Net cash provided by operating activities.

Accepted Answer

A) True 
 B)False

Question 12

On the statement of cash flows prepared under the indirect method,activities that affect stockholders' equity and long-term debt are classified as:

Accepted Answer

A) operating activities. 
B) investing activities. 
C) financing activities. 
D) free cash flows. 
A) operating activities. 
B) investing activities. 
C) financing activities. 
D) free cash flows.

Question 13

A company reports the following balances:   During 2018,net income of $29,000 was reported.No treasury stock was sold during 2018.No common stock was retired during 2018.No land was sold during 2018.What financing activities are reported on the statement of cash flows prepared with the indirect method for the year ending December 31,2018?

Accepted Answer

A) sale of treasury stock $2000 and Payment of dividends $13,000 
B) purchase of treasury stock $2000,Payment of dividends $13,000 and Sale of common stock $151,000 
C) sale of treasury stock $2000,purchase of land $10,000. 
D) payment of dividends $16,000,Sale of common stock $167,000,and Purchase of treasury stock $2000 
A) sale of treasury stock $2000 and Payment of dividends $13,000 
B) purchase of treasury stock $2000,Payment of dividends $13,000 and Sale of common stock $151,000 
C) sale of treasury stock $2000,purchase of land $10,000. 
D) payment of dividends $16,000,Sale of common stock $167,000,and Purchase of treasury stock $2000

Question 14

When preparing the statement of cash flows using the indirect method,which statement is INCORRECT?

Accepted Answer

A) Gains on the sale of long-term assets are subtracted from net income. 
B) Losses on the sale of long-term assets are subtracted from net income. 
C) Depreciation expense is added to net income. 
D) Increases in current liabilities are added to net income. 
A) Gains on the sale of long-term assets are subtracted from net income. 
B) Losses on the sale of long-term assets are subtracted from net income. 
C) Depreciation expense is added to net income. 
D) Increases in current liabilities are added to net income.

Question 15

Google Inc.paid $10.6 billion to acquire other companies.Google also paid $33 billion to purchase long-term securities.How are these cash outflows classified on the statement of cash flows?

Accepted Answer

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

Question 16

On a statement of cash flows prepared by using the direct method,cash receipts from interest and dividends are classified as:

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 17

The method of preparing the statement of cash flows that starts with net income and adjusts it for items that affect net income,but do NOT affect cash is called the:

Accepted Answer

A) net income method. 
B) direct method. 
C) indirect method. 
D) non-cash method. 
A) net income method. 
B) direct method. 
C) indirect method. 
D) non-cash method.

Question 18

Under the direct method of preparing the statement of cash flows,which statement is CORRECT regarding the calculation of cash collected from interest revenue?

Accepted Answer

A) sales plus a decrease in interest receivable 
B) interest revenue plus a decrease in interest receivable 
C) interest revenue plus an increase in interest receivable 
D) interest revenue less a decrease in interest receivable 
A) sales plus a decrease in interest receivable 
B) interest revenue plus a decrease in interest receivable 
C) interest revenue plus an increase in interest receivable 
D) interest revenue less a decrease in interest receivable

Question 19

Highly liquid short-term investments that can be immediately converted into cash are called:

Accepted Answer

A) trading securities. 
B) cash equivalents. 
C) current assets. 
D) accounts receivable. 
A) trading securities. 
B) cash equivalents. 
C) current assets. 
D) accounts receivable.

Question 20

Positive signs of a successful company as seen on the statement of cash flows do NOT include:

Accepted Answer

A) investments in property,plant and equipment. 
B) operating activities are the largest source of cash. 
C) banks are willing to lend money to the company. 
D) the sale of a majority of a company's plant assets. 
A) investments in property,plant and equipment. 
B) operating activities are the largest source of cash. 
C) banks are willing to lend money to the company. 
D) the sale of a majority of a company's plant assets.

The statement of cash flows is presented for a period of time.

When converting net income to net cash provided by operating activities on the statement of cash flows,indirect method,which of the following is NOT added to net income?

All of the following may appear as an adjustment of net income when preparing the statement of cash flows using the indirect method EXCEPT:

Which financial statements cover a period of time?

Income tax expense is $47,000 for the current year.Income tax payable increased $3000 during the year.Interest payable increased $4000 during the year.What is the cash paid for income taxes?

The income statement and the statement of cash flows often paint the same picture of the company.

Purchases of treasury stock would be reported on a statement of cash flows as:

A company purchased a parcel of land using a long-term note payable.Using the direct method,where is this transaction reported on the statement of cash flows?

Interest expense for the current year is $310,000.Interest payable increased $55,000 during the year.Interest receivable increased $11,000 during the year.Interest expense includes $47,000 for the amortization of discount.What is the cash paid for interest?

Because income and cash flow usually move together,net income and cash flow also move together.

Using the indirect method,the operating section of the Statement of Cash Flows begins with Net income and is followed by Adjustments to reconcile net income to Net cash provided by operating activities.

On the statement of cash flows prepared under the indirect method,activities that affect stockholders' equity and long-term debt are classified as:

When preparing the statement of cash flows using the indirect method,which statement is INCORRECT?

Google Inc.paid $10.6 billion to acquire other companies.Google also paid $33 billion to purchase long-term securities.How are these cash outflows classified on the statement of cash flows?

On a statement of cash flows prepared by using the direct method,cash receipts from interest and dividends are classified as:

The method of preparing the statement of cash flows that starts with net income and adjusts it for items that affect net income,but do NOT affect cash is called the:

Under the direct method of preparing the statement of cash flows,which statement is CORRECT regarding the calculation of cash collected from interest revenue?

Highly liquid short-term investments that can be immediately converted into cash are called:

Positive signs of a successful company as seen on the statement of cash flows do NOT include:

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

The statement of cash flows is presented for a period of time.

When converting net income to net cash provided by operating activities on the statement of cash flows,indirect method,which of the following is NOT added to net income?

All of the following may appear as an adjustment of net income when preparing the statement of cash flows using the indirect method EXCEPT:

Which financial statements cover a period of time?

Income tax expense is $47,000 for the current year.Income tax payable increased $3000 during the year.Interest payable increased $4000 during the year.What is the cash paid for income taxes?

The income statement and the statement of cash flows often paint the same picture of the company.

Purchases of treasury stock would be reported on a statement of cash flows as:

A company purchased a parcel of land using a long-term note payable.Using the direct method,where is this transaction reported on the statement of cash flows?

Interest expense for the current year is $310,000.Interest payable increased $55,000 during the year.Interest receivable increased $11,000 during the year.Interest expense includes $47,000 for the amortization of discount.What is the cash paid for interest?

Because income and cash flow usually move together,net income and cash flow also move together.

Using the indirect method,the operating section of the Statement of Cash Flows begins with Net income and is followed by Adjustments to reconcile net income to Net cash provided by operating activities.

On the statement of cash flows prepared under the indirect method,activities that affect stockholders' equity and long-term debt are classified as:

When preparing the statement of cash flows using the indirect method,which statement is INCORRECT?

Google Inc.paid $10.6 billion to acquire other companies.Google also paid $33 billion to purchase long-term securities.How are these cash outflows classified on the statement of cash flows?

On a statement of cash flows prepared by using the direct method,cash receipts from interest and dividends are classified as:

The method of preparing the statement of cash flows that starts with net income and adjusts it for items that affect net income,but do NOT affect cash is called the:

Under the direct method of preparing the statement of cash flows,which statement is CORRECT regarding the calculation of cash collected from interest revenue?

Highly liquid short-term investments that can be immediately converted into cash are called:

Positive signs of a successful company as seen on the statement of cash flows do NOT include:

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