Question 1

The indirect method of preparing a statement of cash flows

Accepted Answer

A) is the overwhelming choice of most companies. 
B) begins with net income in the operating activities section. 
C) will produce the same net figure as the direct method. 
D) All of these choices. 
A) is the overwhelming choice of most companies. 
B) begins with net income in the operating activities section. 
C) will produce the same net figure as the direct method. 
D) All of these choices.

Question 2

For 20x5,Devers Enterprises had average total assets of $1,040,000,sales of $900,000,net income of $100,000,net cash flows from operating activities of $150,000,dividend payments of $50,000,purchases of plant assets of $120,000,and sales of plant assets of $110,000.Using this information,compute (a)cash flow yield, (b)cash flows to sales, (c)cash flows to assets,and (d)free cash flow.Round amounts to one decimal place.

Accepted Answer

a.1.5 times ($150,000 @#LAT-DLM& $100,00

Question 3

Northbrook Corporation issued $60,000 bonds payable to acquire machinery.The journal entry to record the transaction is:

Accepted Answer

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

Question 4

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

Lincoln Company engaged in this transaction: Abandoned fully depreciated equipment.Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

Accepted Answer

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

Question 6

Kingston Company settled a long-term note payable it owed to Creative Company by issuing capital stock.Kingston would report this

Accepted Answer

A) only as a cash outflow from financing activity for the payment of the debt. 
B) only as a cash inflow from financing activity for the issuance of the capital stock. 
C) in the schedule of noncash investing and financing transactions. 
D) as both a cash flow from investing activity and a cash flow from financing activity. 
A) only as a cash outflow from financing activity for the payment of the debt. 
B) only as a cash inflow from financing activity for the issuance of the capital stock. 
C) in the schedule of noncash investing and financing transactions. 
D) as both a cash flow from investing activity and a cash flow from financing activity.

Question 7

The statement of cash flows discloses the effect on cash of the purchase and sale of both short- and long-term investments.

Accepted Answer

A) True 
 B)False

The indirect method of preparing a statement of cash flows

Northbrook Corporation issued $60,000 bonds payable to acquire machinery.The journal entry to record the transaction is:

Lincoln Company engaged in this transaction: Abandoned fully depreciated equipment.Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

Kingston Company settled a long-term note payable it owed to Creative Company by issuing capital stock.Kingston would report this

The statement of cash flows discloses the effect on cash of the purchase and sale of both short- and long-term investments.

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

Filters

Exam 13: The Statement of Cash Flows

The indirect method of preparing a statement of cash flows

Northbrook Corporation issued $60,000 bonds payable to acquire machinery.The journal entry to record the transaction is:

Lincoln Company engaged in this transaction: Abandoned fully depreciated equipment.Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

Kingston Company settled a long-term note payable it owed to Creative Company by issuing capital stock.Kingston would report this

The statement of cash flows discloses the effect on cash of the purchase and sale of both short- and long-term investments.

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

Filters