Question 1

Payment of dividends would be reflected as a cash outflow in the investing activities section of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 2

Assume the indirect method is used to compute net cash flows from operating activities.
-For this item extracted from the financial statements-Decrease in Income Taxes Payable-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 3

Because noncash investing and financing transactions do not affect cash,they should not be reflected in the body of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 4

Assume the indirect method is used to compute net cash flows from operating activities.
-For this item extracted from the financial statements-Decrease in Accounts Receivable-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 5

Lincoln Company engaged in this transaction: Purchased treasury stock with cash.
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) Investing activities section. 
C) Does not represent a cash flow. 
D) Operating activities section. 
A) Financing activities section. 
B) Investing activities section. 
C) Does not represent a cash flow. 
D) Operating activities section.

Question 6

If net cash flows from operating activities were $388,000,net income were $100,000,and net sales were $1,200,000,the cash flow yield would equal (Round amounts to two decimal places)

Accepted Answer

A) $288,000. 
B) $812,000. 
C) 3.88 times. 
D) 3.09 times. 
A) $288,000. 
B) $812,000. 
C) 3.88 times. 
D) 3.09 times.

Question 7

Management would not use the statement of cash flows to

Accepted Answer

A) assess the liquidity of the business. 
B) determine dividend policy. 
C) evaluate the effects of major policy decisions involving investments and financing. 
D) determine the financial position of the company. 
A) assess the liquidity of the business. 
B) determine dividend policy. 
C) evaluate the effects of major policy decisions involving investments and financing. 
D) determine the financial position of the company.

Question 8

Lincoln Company engaged in this transaction: Sold land it was holding for speculation.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) Schedule of noncash investing and financing transactions. 
C) Operating activities section. 
D) Investing activities section. 
A) Financing activities section. 
B) Schedule of noncash investing and financing transactions. 
C) Operating activities section. 
D) Investing activities section.

Question 9

The calculation of free cash flow could include all of the following except

Accepted Answer

A) cash purchases of plant assets. 
B) net cash flows from operating activities. 
C) net income. 
D) dividends paid. 
A) cash purchases of plant assets. 
B) net cash flows from operating activities. 
C) net income. 
D) dividends paid.

Question 10

If the indirect method is used,which of the following would be added to net income to arrive at net cash flows from operating activities?

Accepted Answer

A) Increase in Inventory. 
B) Decrease in Prepaid Expenses. 
C) Decrease in Accounts Payable. 
D) Increase in Accounts Receivable. 
A) Increase in Inventory. 
B) Decrease in Prepaid Expenses. 
C) Decrease in Accounts Payable. 
D) Increase in Accounts Receivable.

Question 11

Net cash flows from operating activities would be needed to calculate cash flow yield,cash flows to assets,and cash flows to sales.

Accepted Answer

A) True 
 B)False

Question 12

Assume the indirect method is used to compute net cash flows from operating activities.
-For this item extracted from the financial statements-Increase in Prepaid Expenses-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 13

The payment of taxes would be included in the operating activities section of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 14

Lincoln Company engaged in this transaction: Transferred cash to money market account.
Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

Accepted Answer

A) Does not represent a cash flow. 
B) Operating activities section. 
C) Investing activities section. 
D) Financing activities section. 
A) Does not represent a cash flow. 
B) Operating activities section. 
C) Investing activities section. 
D) Financing activities section.

Question 15

Assume the indirect method is used to compute net cash flows from operating activities.
-For this item extracted from the financial statements-Dividend Income (assume that cash received is equal to amount reported)-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 16

Give two explanations for why the amount of cash outflow for equipment for the year might not equal the increase in the Equipment account balance from one balance sheet date to the next.

Accepted Answer

Possible explanations for the cash expen

Question 17

Match between columns
                        Premises: Received interest income.
Company sold shares of its own stock for cash.
Paid the U.S. Treasury for income taxes.
Acquired land and buildings by issuance of long-term mortgage payable.
Declared stock dividends.
Collected proceeds from the sale of a long-term investment at cost.
Paid off long-term debt with cash.
Exchanged shares of stock for 15-year bonds.
Purchased equipment with cash.
Declared and paid cash dividends.

Accepted Answer

The Answer of noncash transaction and investing activity and financing is...

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

Investors could use the statement of cash flows to determine whether the company will be able to pay dividends and interest.

Accepted Answer

A) True 
 B)False

Question 20

Assume the indirect method is used to compute net cash flows from operating activities.
-For this item extracted from the financial statements-Loss on Disposal of Equipment-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.

Exam 13: The Statement of Cash Flows

Payment of dividends would be reflected as a cash outflow in the investing activities section of the 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 Income Taxes Payable-indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:

Because noncash investing and financing transactions do not affect cash,they should not be reflected in the body of the 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 Accounts Receivable-indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:

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

If net cash flows from operating activities were $388,000,net income were $100,000,and net sales were $1,200,000,the cash flow yield would equal (Round amounts to two decimal places)

Management would not use the statement of cash flows to

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

The calculation of free cash flow could include all of the following except

If the indirect method is used,which of the following would be added to net income to arrive at net cash flows from operating activities?

Net cash flows from operating activities would be needed to calculate cash flow yield,cash flows to assets,and cash flows to sales.

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

The payment of taxes would be included in the operating activities section of the statement of cash flows.

Lincoln Company engaged in this transaction: Transferred cash to money market account. Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

Give two explanations for why the amount of cash outflow for equipment for the year might not equal the increase in the Equipment account balance from one balance sheet date to the next.

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

Investors could use the statement of cash flows to determine whether the company will be able to pay dividends and interest.

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

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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