Question 1

Rarely would the cash flows from operating activities, as reported on the statement of cash flows, be the same as the net income reported on the income statement.

Accepted Answer

A) True 
 B)False

Question 2

Cash flows from investing activities, as part of the statement of cash flows, include receipts from the issuance of bonds payable.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following does not represent an outflow of cash and therefore would not be reported on the statement of cash flows as a use of cash?

Accepted Answer

A)  purchase of noncurrent assets 
B)  purchase of treasury stock 
C)  discarding an asset that had been fully depreciated 
D)  payment of cash dividends 
A)  purchase of noncurrent assets 
B)  purchase of treasury stock 
C)  discarding an asset that had been fully depreciated 
D)  payment of cash dividends

Question 4

The following two problems are independent of one another.

Accepted Answer

The answer of The following two problems are independent of...

Question 5

Operating expenses other than depreciation for the year were $400,000. Prepaid expenses increased by $17,000 and accrued expenses decreased by $30,000 during the year. Cash payments for operating expenses to be reported on the cash flow statement using the direct method would be

Accepted Answer

A)  $353,000 
B)  $413,000 
C)  $447,000 
D)  $383,000 
A)  $353,000 
B)  $413,000 
C)  $447,000 
D)  $383,000

Question 6

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

Accepted Answer

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

Question 7

To determine cash payments for operating expenses for the cash flow statement using the direct method, a decrease in accrued expenses is added to operating expenses other than depreciation.

Accepted Answer

A) True 
 B)False

Question 8

If cash dividends of $135,000 were paid during the year and the company sold 1,000 shares of common stock at $30 per share, the statement of cash flows would report net cash flow from financing activities as $165,000.

Accepted Answer

A) True 
 B)False

Question 9

In preparing the statement of cash flows, the correct order of reporting cash activities is Financing, Operating, Investing.

Accepted Answer

A) True 
 B)False

Question 10

A building with a cost of $153,000 and accumulated depreciation of $42,000 was sold for a $11,000 gain. When using the indirect method, the cash generated from this investing activity was $121,000.

Accepted Answer

A) True 
 B)False

Question 11

Baxter Company reported a net loss of $13,000 for the year ended December 31, 2010. During the year, accounts receivable decreased by $5,000, merchandise inventory increased by $8,000, accounts payable increased by $10,000, and depreciation expense of $4,000 was recorded. During 2010, operating activities

Accepted Answer

A)  provided net cash of $8,000. 
B)  provided net cash of $2,000. 
C)  used net cash of $8,000. 
D)  used net cash of $2,000. 
A)  provided net cash of $8,000. 
B)  provided net cash of $2,000. 
C)  used net cash of $8,000. 
D)  used net cash of $2,000.

Question 12

On the statement of cash flows, a $7,500 gain on the sale of fixed assets would be

Accepted Answer

A)  added to net income in converting the net income reported on the income statement to cash flows from operating activities 
B)  deducted from net income in converting the net income reported on the income statement to cash flows from operating activities 
C)  added to dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends 
D)  deducted from dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends 
A)  added to net income in converting the net income reported on the income statement to cash flows from operating activities 
B)  deducted from net income in converting the net income reported on the income statement to cash flows from operating activities 
C)  added to dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends 
D)  deducted from dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends

Question 13

Under the direct method of reporting cash flows from operations, the major source of cash is cash received from customers.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following represents an inflow of cash and therefore would be reported on the statement of cash flows?

Accepted Answer

A)  retirement of bond payable 
B)  acquisition of treasury stock 
C)  declaration of stock dividends 
D)  issuance of long-term debt 
A)  retirement of bond payable 
B)  acquisition of treasury stock 
C)  declaration of stock dividends 
D)  issuance of long-term debt

Question 15

The cost of merchandise sold during the year was $45,000. Merchandise inventories were $13,500 and $10,500 at the beginning and end of the year, respectively. Accounts payable were $7,000 and $5,000 at the beginning and end of the year, respectively. Using the direct method of reporting cash flows from operating activities, cash payments for merchandise total

Accepted Answer

A)  $46,000 
B)  $44,000 
C)  $50,000 
D)  $40,000 
A)  $46,000 
B)  $44,000 
C)  $50,000 
D)  $40,000

Question 16

Rogers Company reported net income of $35,000 for the year. During the year, accounts receivable increased by $7,000, accounts payable decreased by $3,000 and depreciation expense of $8,000 was recorded. Net cash provided by operating activities for the year is

Accepted Answer

A)  $53,000. 
B)  $47,000. 
C)  $33,000 
D)  $37,000. 
A)  $53,000. 
B)  $47,000. 
C)  $33,000 
D)  $37,000.

Question 17

Cash paid for preferred stock dividends should be shown on the 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 18

Based on the following, what is free cash flow?

Accepted Answer

Operations includes $2,000 for depreciat

Question 19

Under the direct method of preparing a Statement of Cash Flows, the gain on the sale of land is not adjusted or reported as part of cash flows from operating activities.

Accepted Answer

A) True 
 B)False

Question 20

Cash dividends of $45,000 were declared during the year. Cash dividends payable were $10,000 at the beginning of the year and $15,000 at the end of the year. The amount of cash for the payment of dividends during the year is

Accepted Answer

A)  $50,000 
B)  $40,000 
C)  $55,000 
D)  $35,000 
A)  $50,000 
B)  $40,000 
C)  $55,000 
D)  $35,000

Exam 14: Statement of Cash Flows

Rarely would the cash flows from operating activities, as reported on the statement of cash flows, be the same as the net income reported on the income statement.

Cash flows from investing activities, as part of the statement of cash flows, include receipts from the issuance of bonds payable.

Which of the following does not represent an outflow of cash and therefore would not be reported on the statement of cash flows as a use of cash?

The following two problems are independent of one another.

Operating expenses other than depreciation for the year were $400,000. Prepaid expenses increased by $17,000 and accrued expenses decreased by $30,000 during the year. Cash payments for operating expenses to be reported on the cash flow statement using the direct method would be

To determine cash payments for operating expenses for the cash flow statement using the direct method, a decrease in accrued expenses is added to operating expenses other than depreciation.

If cash dividends of $135,000 were paid during the year and the company sold 1,000 shares of common stock at $30 per share, the statement of cash flows would report net cash flow from financing activities as $165,000.

In preparing the statement of cash flows, the correct order of reporting cash activities is Financing, Operating, Investing.

A building with a cost of $153,000 and accumulated depreciation of $42,000 was sold for a $11,000 gain. When using the indirect method, the cash generated from this investing activity was $121,000.

On the statement of cash flows, a $7,500 gain on the sale of fixed assets would be

Under the direct method of reporting cash flows from operations, the major source of cash is cash received from customers.

Which of the following represents an inflow of cash and therefore would be reported on the statement of cash flows?

Rogers Company reported net income of $35,000 for the year. During the year, accounts receivable increased by $7,000, accounts payable decreased by $3,000 and depreciation expense of $8,000 was recorded. Net cash provided by operating activities for the year is

Cash paid for preferred stock dividends should be shown on the statement of cash flows under

Based on the following, what is free cash flow?

Under the direct method of preparing a Statement of Cash Flows, the gain on the sale of land is not adjusted or reported as part of cash flows from operating activities.

Cash dividends of $45,000 were declared during the year. Cash dividends payable were $10,000 at the beginning of the year and $15,000 at the end of the year. The amount of cash for the payment of dividends during the year is

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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