Question 1

Cash flows from financing activities, as part of the statement of cash flows, include payments for dividends.

Accepted Answer

A) True 
 B)False

Question 2

A major disadvantage of the indirect method of reporting cash flows from operating activities is that the difference between the net amount of cash flows from operating activities and net income is emphasized.

Accepted Answer

A) True 
 B)False

Question 3

The board of directors declared cash dividends totaling $252,000 during the current year. The comparative balance sheet indicates dividends payable of $48,000 at the beginning of the year and $63,000 at the end of the year. What was the amount of cash payments to stockholders during the year?

Accepted Answer

The answer of The board of directors declared cash dividends...

Question 4

If land costing $145,000 was sold for $205,000, the $60,000 gain on the sale would be added to net income in of the operating activities section of the statement of cash flows (prepared by the indirect method).

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is a noncash investing and financing activity?

Accepted Answer

A)  payment of a cash dividend 
B)  payment of a six-month note payable 
C)  purchase of merchandise inventory on account 
D)  issuance of common stock to acquire land 
A)  payment of a cash dividend 
B)  payment of a six-month note payable 
C)  purchase of merchandise inventory on account 
D)  issuance of common stock to acquire land

Question 6

A corporation uses the indirect method for preparing the Statement of Cash Flows. A fixed asset has been sold for $25,000 representing a gain of $4,500. The value in the operating activities section regarding this event would be:

Accepted Answer

A)  $25,000 
B)  ($4,500) 
C)  $29,500 
D)  $4,500 
A)  $25,000 
B)  ($4,500) 
C)  $29,500 
D)  $4,500

Question 7

The statement of cash flows is one of the basic financial statements.

Accepted Answer

A) True 
 B)False

Question 8

In calculating cash flows from operating activities using the indirect method, a gain on the sale of equipment is

Accepted Answer

A)  added to net income. 
B)  deducted from net income. 
C)  ignored because it does not affect cash. 
D)  reported supplementally as a non-cash investing and financing activity 
A)  added to net income. 
B)  deducted from net income. 
C)  ignored because it does not affect cash. 
D)  reported supplementally as a non-cash investing and financing activity

Question 9

Balances of the current asset and current liability accounts at the end and beginning of the year are as follows:
   Use the direct method to prepare the cash flows from operating activities section of a statement of cash flows.

Accepted Answer

The answer of Balances of the current asset and current...

Question 10

Cash flows from investing activities, as part of the statement of cash flows, include payments for the acquisition of fixed assets.

Accepted Answer

A) True 
 B)False

Question 11

An analysis of the general ledger accounts indicates that equipment, with an original cost of $134,000 and accumulated depreciation of $105,000 on the date of sale, was sold for $20,000 during the year. Using this information, indicate the items to be reported on the statement of cash flows using the indirect method.

Accepted Answer

The answer of An analysis of the general ledger accounts...

Question 12

The following selected account balances appeared on the financial statements of the Washington Company:   The Washington Company uses the direct method to calculate net cash flow from operating activities.
Cash collections from customers are

Accepted Answer

A)  $56,000 
B)  $52,000 
C)  $60,000 
D)  $45,000 
A)  $56,000 
B)  $52,000 
C)  $60,000 
D)  $45,000

Question 13

The comparative balance sheet of Barry Company, for 2011 and the preceding year ended December 31, 2010, appears below in condensed form:
   Additional data for the current year are as follows:
   Prepare a statement of cash flows using the indirect method.

Accepted Answer

The answer of The comparative balance sheet of Barry Company,...

Question 14

Sales reported on the income statement were $372,000. The accounts receivable balance declined $4,500 over the year. The amount of cash received from customers was $367,500.

Accepted Answer

A) True 
 B)False

Question 15

A ten-year bond was issued at par for $250,000 cash. This transaction should be shown on a statement of cash flows under

Accepted Answer

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

Question 16

Cash outflows from financing activities include the payment of cash dividends, the acquisition of treasury stock, and the repayment of amounts borrowed.

Accepted Answer

A) True 
 B)False

Question 17

Cash receipts from interest and dividends are classified as

Accepted Answer

A)  financing activities 
B)  operating activities. 
C)  investing activities. 
D)  either financing or investing activities. 
A)  financing activities 
B)  operating activities. 
C)  investing activities. 
D)  either financing or investing activities.

Question 18

Purchasing equipment by issuing a six-month note should be shown on the statement of cash flows under the investing activities section.

Accepted Answer

A) True 
 B)False

Question 19

Master Designs Company has cash flows for operating activities of $350,000. Cash flows used for investments in property, plant, and equipment totaled $65,000, of which 70% of this investment was used to replace machinery to maintain existing capacity.
What is the free cash flow for Master Designs?

Accepted Answer

@#IMG-DLM& 
*Property, plant,

Question 20

Cash receipts received from the issuance of a mortgage notes payable would be classified as

Accepted Answer

A)  investing activities. 
B)  operating activities. 
C)  either financing or investing activities. 
D)  financing activities. 
A)  investing activities. 
B)  operating activities. 
C)  either financing or investing activities. 
D)  financing activities.

Exam 14: Statement of Cash Flows

Cash flows from financing activities, as part of the statement of cash flows, include payments for dividends.

A major disadvantage of the indirect method of reporting cash flows from operating activities is that the difference between the net amount of cash flows from operating activities and net income is emphasized.

The board of directors declared cash dividends totaling $252,000 during the current year. The comparative balance sheet indicates dividends payable of $48,000 at the beginning of the year and $63,000 at the end of the year. What was the amount of cash payments to stockholders during the year?

If land costing $145,000 was sold for $205,000, the $60,000 gain on the sale would be added to net income in of the operating activities section of the statement of cash flows (prepared by the indirect method).

Which of the following is a noncash investing and financing activity?

A corporation uses the indirect method for preparing the Statement of Cash Flows. A fixed asset has been sold for $25,000 representing a gain of $4,500. The value in the operating activities section regarding this event would be:

The statement of cash flows is one of the basic financial statements.

In calculating cash flows from operating activities using the indirect method, a gain on the sale of equipment is

Balances of the current asset and current liability accounts at the end and beginning of the year are as follows: Use the direct method to prepare the cash flows from operating activities section of a statement of cash flows.

Cash flows from investing activities, as part of the statement of cash flows, include payments for the acquisition of fixed assets.

The following selected account balances appeared on the financial statements of the Washington Company: The Washington Company uses the direct method to calculate net cash flow from operating activities. Cash collections from customers are

The comparative balance sheet of Barry Company, for 2011 and the preceding year ended December 31, 2010, appears below in condensed form: Additional data for the current year are as follows: Prepare a statement of cash flows using the indirect method.

Sales reported on the income statement were $372,000. The accounts receivable balance declined $4,500 over the year. The amount of cash received from customers was $367,500.

A ten-year bond was issued at par for $250,000 cash. This transaction should be shown on a statement of cash flows under

Cash outflows from financing activities include the payment of cash dividends, the acquisition of treasury stock, and the repayment of amounts borrowed.

Cash receipts from interest and dividends are classified as

Purchasing equipment by issuing a six-month note should be shown on the statement of cash flows under the investing activities section.

Master Designs Company has cash flows for operating activities of $350,000. Cash flows used for investments in property, plant, and equipment totaled $65,000, of which 70% of this investment was used to replace machinery to maintain existing capacity. What is the free cash flow for Master Designs?

Cash receipts received from the issuance of a mortgage notes payable would be classified as

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

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