Question 1

Which accounts are analyzed to determine cash flows from financing activities?

Accepted Answer

Cash flow from financing activ

Question 2

Freewalt Co.purchased investments for $160,000 cash.The journal entry to record this transaction that correctly shows the outflow of cash is:

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
A) 
  
B) 
  
C) 
  
D)

Question 3

Since it impacts Retained Earnings,the net income for the period would appear in the cash flows from financing activities section of a statement of cash flows prepared using the indirect method.

Accepted Answer

A) True 
 B)False

Question 4

The primary purpose of the statement of cash flows is to provide information about a company's investing and financing activities during an accounting period.

Accepted Answer

A) True 
 B)False

Question 5

Lincoln Company engaged in this transaction: Issued stock for land.
Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

Accepted Answer

A) Financing activities section. 
B) Operating activities section. 
C) Investing activities section. 
D) Schedule of noncash investing and financing transactions. 
A) Financing activities section. 
B) Operating activities section. 
C) Investing activities section. 
D) Schedule of noncash investing and financing transactions.

Question 6

Ralston Company's cash balance at December 31,20x5,was $23,000.During the year,Ralston sold assets with a book value of $245,000 that resulted in a loss of $110,000.Calculate the company's cash balance at December 31,20x6,given the following information for the year ended December 31,20x6.Show your work.

Accepted Answer

The answer of Ralston Company's cash balance at December 31,20x5,was...

Question 7

Investing activities involve

Accepted Answer

A) Long-term investments. 
B) Short-term investments. 
C) Long-term assets. 
D) All of these choices. 
A) Long-term investments. 
B) Short-term investments. 
C) Long-term assets. 
D) All of these choices.

Question 8

Northbrook Corporation is preparing a statement of cash flows.The following transactions occurred during the year: 
1)Sold machinery for $9,000 cash.
2)Purchased a building for $80,000 cash.
3)Issued $70,000 worth of stock to acquire an airplane.
4)Converted long-term bonds by issuing $100,000 worth of stock.
5)Declared and paid a $10,000 cash dividend.
-Transaction 5 would be found on the statement of cash flows in the

Accepted Answer

A) noncash investing and financing transactions section. 
B) cash flows from financing activities section. 
C) cash flows from operating activities section. 
D) cash flows from investing activities section. 
A) noncash investing and financing transactions section. 
B) cash flows from financing activities section. 
C) cash flows from operating activities section. 
D) cash flows from investing activities section.

Question 9

How are cash equivalents treated on a statement of cash flows?

Accepted Answer

A) They are disclosed in the operating activities section. 
B) They are combined with the Cash account. 
C) They are disclosed in the investing activities section. 
D) They are disclosed in the financing activities section. 
A) They are disclosed in the operating activities section. 
B) They are combined with the Cash account. 
C) They are disclosed in the investing activities section. 
D) They are disclosed in the financing activities section.

Question 10

Assume the indirect method is used to compute net cash flows from operating activities.
-For this item extracted from the financial statements-Decrease in Inventory-indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:

Accepted Answer

A) Add to net income to arrive at net cash flows from operating activities. 
B) Subtract from net income to arrive at net cash flows from operating activities. 
C) Not used to adjust net income to calculate net cash flows from operating activities. 
A) Add to net income to arrive at net cash flows from operating activities. 
B) Subtract from net income to arrive at net cash flows from operating activities. 
C) Not used to adjust net income to calculate net cash flows from operating activities.

Question 11

The activity in the Plant Assets and related Accumulated Depreciation accounts for 20x5 is shown below.In addition,the income statement shows a gain on sale of plant assets of $16,000.
   Based on the information given,compute the amounts to be shown and indicate how they would appear on the statement of cash flows.Assume that the indirect method is being used and that the plant assets were purchased for cash.

Accepted Answer

@#IMG-DLM&
20x5 depreciation expense of $36,000 is

Question 12

During 20x5,Oates Company had sales of $250,000,net income of $25,000,average total assets of $350,000,dividend payments of $17,500,net cash flows from operating activities of $26,000,purchases of plant assets of $37,500,and sales of plant assets of $45,000.Cash flow yield equals (Round amounts to one decimal place)

Accepted Answer

A) 1.5 times. 
B) 1.0 times. 
C) 2.1 times. 
D) 1.3 times. 
A) 1.5 times. 
B) 1.0 times. 
C) 2.1 times. 
D) 1.3 times.

Question 13

During 20x5,Oates Company had sales of $250,000,net income of $25,000,average total assets of $350,000,dividend payments of $17,500,net cash flows from operating activities of $36,000,purchases of plant assets of $37,500,and sales of plant assets of $45,000.Cash flows to assets equals (Round amounts to one decimal place)

Accepted Answer

A) 18.0 percent. 
B) 14.4 percent. 
C) 12.0 percent. 
D) 10.3 percent. 
A) 18.0 percent. 
B) 14.4 percent. 
C) 12.0 percent. 
D) 10.3 percent.

Question 14

Match between columns
                        Premises: Increase in Accounts Payable
Gain on Sale of Land
Amortization Expense
Decrease in Wages Payable
Decrease in Income Taxes Payable
Loss on Disposal of Truck
Decrease in Accounts Receivable
Increase in Inventory
Decrease in Prepaid Rent
Depreciation Expense

Accepted Answer

The Answer of added to (+) and deducted from (-) is...

Question 15

If the indirect method is used,which of the following is a proper adjustment to net income to arrive at net cash flows from operating activities?

Accepted Answer

A) deducting a decrease in Prepaid Expenses. 
B) deducting an increase in Salaries Payable. 
C) adding an increase in Accounts Receivable. 
D) adding a decrease in Inventory. 
A) deducting a decrease in Prepaid Expenses. 
B) deducting an increase in Salaries Payable. 
C) adding an increase in Accounts Receivable. 
D) adding a decrease in Inventory.

Question 16

Foxworth Company sold plant assets that had accumulated depreciation of $20,000.These assets cost Foxworth $70,000 when purchased 4 years ago.The sale of the assets resulted in a gain for Foxworth of $2,000.The amount of cash reported for this transaction on Foxworth's statement of cash flows is a:

Accepted Answer

A) $70,000 outflow. 
B) $52,000 inflow. 
C) $72,000 inflow. 
D) $2,000 inflow. 
A) $70,000 outflow. 
B) $52,000 inflow. 
C) $72,000 inflow. 
D) $2,000 inflow.

Question 17

The statement of cash flows shows the effects on net income of a company's operating,investing,and financing activities for an accounting period.

Accepted Answer

A) True 
 B)False

Question 18

Using the indirect method,calculate the amount of net cash flows from operating activities from the following data.Show your work

Accepted Answer

The answer of Using the indirect method,calculate the amount of...

Question 19

Cash inflows and outflows are not netted in the investing activities section of the statement of cash flows but are separately disclosed to give the reader full information.

Accepted Answer

A) True 
 B)False

Question 20

What elements are used to calculate free cash flow? Indicate whether the element is added or subtracted.

Accepted Answer

Net cash flows from operating

Exam 13: The Statement of Cash Flows

Which accounts are analyzed to determine cash flows from financing activities?

Freewalt Co.purchased investments for $160,000 cash.The journal entry to record this transaction that correctly shows the outflow of cash is:

Since it impacts Retained Earnings,the net income for the period would appear in the cash flows from financing activities section of a statement of cash flows prepared using the indirect method.

The primary purpose of the statement of cash flows is to provide information about a company's investing and financing activities during an accounting period.

Lincoln Company engaged in this transaction: Issued stock for land. Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

Investing activities involve

How are cash equivalents treated on a statement of cash flows?

Assume the indirect method is used to compute net cash flows from operating activities. -For this item extracted from the financial statements-Decrease in Inventory-indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:

If the indirect method is used,which of the following is a proper adjustment to net income to arrive at net cash flows from operating activities?

Foxworth Company sold plant assets that had accumulated depreciation of $20,000.These assets cost Foxworth $70,000 when purchased 4 years ago.The sale of the assets resulted in a gain for Foxworth of $2,000.The amount of cash reported for this transaction on Foxworth's statement of cash flows is a:

The statement of cash flows shows the effects on net income of a company's operating,investing,and financing activities for an accounting period.

Using the indirect method,calculate the amount of net cash flows from operating activities from the following data.Show your work

Cash inflows and outflows are not netted in the investing activities section of the statement of cash flows but are separately disclosed to give the reader full information.

What elements are used to calculate free cash flow? Indicate whether the element is added or subtracted.

Uses of Accounting Information and the Financial Statements

Measurement Concepts: Recording Business Transactions

Measuring Business Income: Adjusting the Accounts

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long-Term Assets

Current Liabilities and Fair Value Accounting

Long-Term Liabilities

Stockholders Equity

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems: Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, including Target Costing and Transfer Pricing

Quality Management and Measurement

Accounting for Unincorporated Businesses

Accounting for Investments

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