Question 1

Creditors analyze the statement of cash flows to determine:

Accepted Answer

A) total interest earned during the period. 
B) the quality of the company's earnings. 
C) whether or not the company can pay principal and interest on its debt. 
D) if management was overpaid. 
A) total interest earned during the period. 
B) the quality of the company's earnings. 
C) whether or not the company can pay principal and interest on its debt. 
D) if management was overpaid.

Question 2

The financial statement that reports cash receipts and cash payments classified according to the company's operating,investing,and financing activities is the:

Accepted Answer

A) income statement. 
B) balance sheet. 
C) statement of cash flows. 
D) statement of stockholders' equity. 
A) income statement. 
B) balance sheet. 
C) statement of cash flows. 
D) statement of stockholders' equity.

Question 3

When preparing a statement of cash flows,cash equivalents are subtracted from cash in order to calculate the net change in cash during a period.

Accepted Answer

A) True 
 B)False

Question 4

The income statement and other data for Davidson Carpet Town,Inc. ,follow:
   The changes in the current assets and current liabilities for the year ending December 31,2019 were:
   Using the direct method,prepare the operating activities section of the statement of cash flows for the year ending December 31,2019.Please show calculations.

Accepted Answer

@#IMG-DLM& Please note: The two cash out

Question 5

Interest paid on debt would be reported on a statement of cash flows,prepared by using the direct method,under:

Accepted Answer

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

Question 6

Only the financing activities section of a statement of cash flows differs between the direct and indirect methods.

Accepted Answer

A) True 
 B)False

Question 7

The statement of cash flows classifies cash receipts and payments as operating,investing,or financing activities.

Accepted Answer

A) True 
 B)False

Question 8

On a statement of cash flows prepared using the indirect method,an increase in accounts payable during the period is:

Accepted Answer

A) added to net income to determine net cash provided by operating activities. 
B) deducted from net income to determine net cash provided by operating activities. 
C) shown as a cash inflow in the investing activities section. 
D) shown as a cash inflow in the financing activities section. 
A) added to net income to determine net cash provided by operating activities. 
B) deducted from net income to determine net cash provided by operating activities. 
C) shown as a cash inflow in the investing activities section. 
D) shown as a cash inflow in the financing activities section.

Question 9

On the statement of cash flows,in which section would the purchase of land with cash appear?

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 10

If a company reports high net income,it may still have difficulty paying its bills.

Accepted Answer

A) True 
 B)False

Question 11

Depreciation expense is added to net income when reconciling net income to net cash provided by operating activities because it:

Accepted Answer

A) represents a cash inflow. 
B) is a tax deduction that reduces the payment of taxes. 
C) conserves cash outflows for taxes. 
D) reduces net income but has no effect on cash,so we add depreciation expense to net income to cancel the deduction. 
A) represents a cash inflow. 
B) is a tax deduction that reduces the payment of taxes. 
C) conserves cash outflows for taxes. 
D) reduces net income but has no effect on cash,so we add depreciation expense to net income to cancel the deduction.

Question 12

Of the three types of business activities reported on a statement of cash flows,investing activities are the most important when evaluating a business.

Accepted Answer

A) True 
 B)False

Question 13

In computing net cash provided by operating activities using the indirect method,each of the following is added to net income EXCEPT:

Accepted Answer

A) an increase in accrued expenses payable. 
B) a gain on sale of equipment. 
C) depreciation expense. 
D) a decrease in inventory. 
A) an increase in accrued expenses payable. 
B) a gain on sale of equipment. 
C) depreciation expense. 
D) a decrease in inventory.

Question 14

On a statement of cash flows,activities that affect long-term assets are classified as:

Accepted Answer

A) operating activities. 
B) investing activities. 
C) financing activities. 
D) stockholders' equity activities. 
A) operating activities. 
B) investing activities. 
C) financing activities. 
D) stockholders' equity activities.

Question 15

Using the indirect method of preparing the statement of cash flows,which of the following would be added to net income?

Accepted Answer

A) depletion expense 
B) an increase in accounts receivable 
C) a decrease in accounts payable 
D) gain on the sale of property 
A) depletion expense 
B) an increase in accounts receivable 
C) a decrease in accounts payable 
D) gain on the sale of property

Question 16

On a statement of cash flows prepared with the indirect method,financing activities do NOT include:

Accepted Answer

A) payment of principal amounts of long-term debt. 
B) payment of interest on long-term debt. 
C) payment of dividends. 
D) sale of treasury stock. 
A) payment of principal amounts of long-term debt. 
B) payment of interest on long-term debt. 
C) payment of dividends. 
D) sale of treasury stock.

Question 17

A company reports the following balances:   During 2019,dividends of $16,000 were declared and paid.What is net income for 2019?

Accepted Answer

A) $4000 
B) $12,000 
C) $16,000 
D) $28,000 
A) $4000 
B) $12,000 
C) $16,000 
D) $28,000

Question 18

An increase in common stock sold for cash would be listed as an investing activity when preparing the statement of cash flows under the indirect method.

Accepted Answer

A) True 
 B)False

Question 19

On January 1,2019,plant assets,net are $200,000.On December 31,2019,plant assets,net are $250,000.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 $8000.What is the book value of the plant asset sold during the year?

Accepted Answer

A) $0 
B) $77,000 
C) $85,000 
D) $105,000 
A) $0 
B) $77,000 
C) $85,000 
D) $105,000

Question 20

The Net cash provided by financing activities is the most important category on the statement of cash flows because it generates the most cash for most companies.

Accepted Answer

A) True 
 B)False

Creditors analyze the statement of cash flows to determine:

The financial statement that reports cash receipts and cash payments classified according to the company's operating,investing,and financing activities is the:

When preparing a statement of cash flows,cash equivalents are subtracted from cash in order to calculate the net change in cash during a period.

Interest paid on debt would be reported on a statement of cash flows,prepared by using the direct method,under:

Only the financing activities section of a statement of cash flows differs between the direct and indirect methods.

The statement of cash flows classifies cash receipts and payments as operating,investing,or financing activities.

On a statement of cash flows prepared using the indirect method,an increase in accounts payable during the period is:

On the statement of cash flows,in which section would the purchase of land with cash appear?

If a company reports high net income,it may still have difficulty paying its bills.

Depreciation expense is added to net income when reconciling net income to net cash provided by operating activities because it:

Of the three types of business activities reported on a statement of cash flows,investing activities are the most important when evaluating a business.

In computing net cash provided by operating activities using the indirect method,each of the following is added to net income EXCEPT:

On a statement of cash flows,activities that affect long-term assets are classified as:

Using the indirect method of preparing the statement of cash flows,which of the following would be added to net income?

On a statement of cash flows prepared with the indirect method,financing activities do NOT include:

A company reports the following balances: During 2019,dividends of $16,000 were declared and paid.What is net income for 2019?

An increase in common stock sold for cash would be listed as an investing activity when preparing the statement of cash flows under the indirect method.

The Net cash provided by financing activities is the most important category on the statement of cash flows because it generates the most cash for most companies.

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

Creditors analyze the statement of cash flows to determine:

The financial statement that reports cash receipts and cash payments classified according to the company's operating,investing,and financing activities is the:

When preparing a statement of cash flows,cash equivalents are subtracted from cash in order to calculate the net change in cash during a period.

Interest paid on debt would be reported on a statement of cash flows,prepared by using the direct method,under:

Only the financing activities section of a statement of cash flows differs between the direct and indirect methods.

The statement of cash flows classifies cash receipts and payments as operating,investing,or financing activities.

On a statement of cash flows prepared using the indirect method,an increase in accounts payable during the period is:

On the statement of cash flows,in which section would the purchase of land with cash appear?

If a company reports high net income,it may still have difficulty paying its bills.

Depreciation expense is added to net income when reconciling net income to net cash provided by operating activities because it:

Of the three types of business activities reported on a statement of cash flows,investing activities are the most important when evaluating a business.

In computing net cash provided by operating activities using the indirect method,each of the following is added to net income EXCEPT:

On a statement of cash flows,activities that affect long-term assets are classified as:

Using the indirect method of preparing the statement of cash flows,which of the following would be added to net income?

On a statement of cash flows prepared with the indirect method,financing activities do NOT include:

A company reports the following balances: During 2019,dividends of $16,000 were declared and paid.What is net income for 2019?

An increase in common stock sold for cash would be listed as an investing activity when preparing the statement of cash flows under the indirect method.

The Net cash provided by financing activities is the most important category on the statement of cash flows because it generates the most cash for most companies.

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