Question 1

If a business issued bonds payable in exchange for land, the transaction would be reported in a separate schedule on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Accounts receivable resulting from sales to customers amounted to $40,000 and $31,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $120,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is

Accepted Answer

A)  $120,000. 
B)  $129,000. 
C)  $151,000. 
D)  $111,000. 
A)  $120,000. 
B)  $129,000. 
C)  $151,000. 
D)  $111,000.

Question 4

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

Accepted Answer

A)  depreciation expense 
B)  an increase in inventory 
C)  a gain on the sale of equipment 
D)  dividends declared and paid 
A)  depreciation expense 
B)  an increase in inventory 
C)  a gain on the sale of equipment 
D)  dividends declared and paid

Question 5

If 800 shares of $40 par common stock are sold for $43,000, the $43,000 would be reported in the cash flows from financing activities section of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 6

There is no difference in the Investing and Financing sections of the statement of cash flows using the indirect and direct method.

Accepted Answer

A) True 
 B)False

Question 7

Match between columns
                        Premises: Purchased buildings
Issued bonds
Sold equipment.
Paid cash dividends
Redeemed bonds
Sold long-term investment.
Purchased treasury stock
Net income
Issued preferred stock
Purchased patents
Issued common stock

Accepted Answer

The Answer of operating and financing and investing is...

Question 8

Cash flows from investing activities, as part of the statement of cash flows, include payments for the purchase of treasury stock.

Accepted Answer

A) True 
 B)False

Question 9

Investing activities include

Accepted Answer

A)  collecting cash on loans made. 
B)  obtaining cash from customers. 
C)  obtaining capital from stockholders. 
D)  repaying money previously borrowed. 
A)  collecting cash on loans made. 
B)  obtaining cash from customers. 
C)  obtaining capital from stockholders. 
D)  repaying money previously borrowed.

Question 10

Which of the following types of transactions would be reported as a cash flow from investing activity on the statement of cash flows?

Accepted Answer

A)  issuance of bonds payable 
B)  issuance of capital stock 
C)  purchase of treasury stock 
D)  purchase of noncurrent assets 
A)  issuance of bonds payable 
B)  issuance of capital stock 
C)  purchase of treasury stock 
D)  purchase of noncurrent assets

Question 11

To determine cash payments for income tax for the cash flow statement using the direct method, an increase in income taxes payable is added to the income tax expense.

Accepted Answer

A) True 
 B)False

Question 12

Match between columns
                        Premises: Issued common stock
Net income
Sold long-term investments
Purchased treasury stock
Sold equipment at book value
Depreciation expense

Accepted Answer

The Answer of Investing and Operating and financing is...

Question 13

Net income for the year was $29,500. Accounts receivable increased $2,500, and accounts payable increased $5,400. Under the indirect method, the cash flow from operations is $32,400.

Accepted Answer

A) True 
 B)False

Question 14

Complete each of the columns on the table below, indicating in which section each item would be reported on the statement of cash flow (Operating, Investing, or Financing), the amount that would be reported, and whether the item would create an increase or decrease in cash. For item that affect more than one section of the statement, indicate all affected. Assume the indirect method of reporting cash flows operating activities.
The first item has been completed as an example.

Accepted Answer

The answer of Complete each of the columns on the...

Question 15

In determining the cash flows from operating activities for the statement of cash flows by the indirect method, the depreciation expense for the period is added to the net income for the period.

Accepted Answer

A) True 
 B)False

Question 16

Depreciation on factory equipment would be reported in the statement of cash flows prepared by the indirect method in

Accepted Answer

A)  the cash flows from financing activities section 
B)  the cash flows from investing activities section 
C)  a separate schedule 
D)  the cash flows from operating activities section 
A)  the cash flows from financing activities section 
B)  the cash flows from investing activities section 
C)  a separate schedule 
D)  the cash flows from operating activities section

Question 17

On the statement of cash flows, the cash flows from investing activities section would include

Accepted Answer

A)  receipts from the issuance of capital stock 
B)  payments for dividends 
C)  payments for retirement of bonds payable 
D)  receipts from the sale of investments 
A)  receipts from the issuance of capital stock 
B)  payments for dividends 
C)  payments for retirement of bonds payable 
D)  receipts from the sale of investments

Question 18

Which of the following should be shown on a statement of cash flows under the financing activity section?

Accepted Answer

A)  the purchase of a long-term investment in the common stock of another company 
B)  the payment of cash to retire a long-term note 
C)  the proceeds from the sale of a building 
D)  the issuance of a long-term note to acquire land 
A)  the purchase of a long-term investment in the common stock of another company 
B)  the payment of cash to retire a long-term note 
C)  the proceeds from the sale of a building 
D)  the issuance of a long-term note to acquire land

Question 19

Which of the following below increases cash?

Accepted Answer

A)  depreciation expense 
B)  acquisition of treasury stock 
C)  borrowing money by issuing a six-month note 
D)  the declaration of a cash dividend 
A)  depreciation expense 
B)  acquisition of treasury stock 
C)  borrowing money by issuing a six-month note 
D)  the declaration of a cash dividend

Question 20

Which one of the following below should be added to net income in calculating net cash flow from operating activities using the indirect method?

Accepted Answer

A)  a gain on the sale of land 
B)  a decrease in accounts payable 
C)  an increase in accrued liabilities 
D)  dividends paid on common stock 
A)  a gain on the sale of land 
B)  a decrease in accounts payable 
C)  an increase in accrued liabilities 
D)  dividends paid on common stock

Exam 14: Statement of Cash Flows

If a business issued bonds payable in exchange for land, the transaction would be reported in a separate schedule on the statement of cash flows.

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

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

If 800 shares of $40 par common stock are sold for $43,000, the $43,000 would be reported in the cash flows from financing activities section of the statement of cash flows.

There is no difference in the Investing and Financing sections of the statement of cash flows using the indirect and direct method.

Cash flows from investing activities, as part of the statement of cash flows, include payments for the purchase of treasury stock.

Investing activities include

Which of the following types of transactions would be reported as a cash flow from investing activity on the statement of cash flows?

To determine cash payments for income tax for the cash flow statement using the direct method, an increase in income taxes payable is added to the income tax expense.

Net income for the year was $29,500. Accounts receivable increased $2,500, and accounts payable increased $5,400. Under the indirect method, the cash flow from operations is $32,400.

In determining the cash flows from operating activities for the statement of cash flows by the indirect method, the depreciation expense for the period is added to the net income for the period.

Depreciation on factory equipment would be reported in the statement of cash flows prepared by the indirect method in

On the statement of cash flows, the cash flows from investing activities section would include

Which of the following should be shown on a statement of cash flows under the financing activity section?

Which of the following below increases cash?

Which one of the following below should be added to net income in calculating net cash flow from operating activities using the indirect method?

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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