Question 1

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)  an increase in inventory 
B)  a decrease in accounts payable 
C)  preferred dividends declared and paid 
D)  a decrease in accounts receivable 
A)  an increase in inventory 
B)  a decrease in accounts payable 
C)  preferred dividends declared and paid 
D)  a decrease in accounts receivable

Question 2

Using the indirect method, if land costing $85,000 was sold for $145,000, the amount reported in the financing activities section of the statement of cash flows would be $85,000.

Accepted Answer

A) True 
 B)False

Question 3

The Dickinson Company reported net income of $155,000 for the current year. Depreciation recorded on buildings and equipment amounted to $65,000 for the year. In addition, a building with an original cost of $250,000 and accumulated depreciation of $190,000 on the date of the sale, was sold for $75,000. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows:
   Instructions
Prepare the cash flows from the operating activities section of the statement of cash flows using the indirect method.

Accepted Answer

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Question 4

On the basis of the details of the common stock account presented below, calculate the total amount to be recorded in financing section of the statement of cash flows. Indicate whether the amount results in an increase or decrease in cash.

Accepted Answer

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Question 5

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

Accepted Answer

A)  receipts from the sale of investments 
B)  payments for the acquisition of investments 
C)  receipts from a note receivable 
D)  receipts from the issuance of capital stock 
A)  receipts from the sale of investments 
B)  payments for the acquisition of investments 
C)  receipts from a note receivable 
D)  receipts from the issuance of capital stock

Question 6

The statement of cash flows is  not one of the basic financial statements.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

The Answer of operating (O) and financing (F) and investing is...

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

If $475,000 of bonds payable are sold at 101, $475,000 would be reported in the cash flows from financing activities section of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 10

Durrand Corporation's accumulated depreciation increased by $12,000, while patents decreased by $2,200 between consecutive balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a gain of $4,300 from sale of land. Reconcile a net income of $65,000 to net cash flow from operating activities.

Accepted Answer

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Question 11

A company purchases equipment for $32,000 cash. This transaction 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 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

Free cash flow is the measure of operating cash flow available for corporate purposes after providing sufficient fixed asset additions to maintain current productive capacity and dividends.

Accepted Answer

A) True 
 B)False

Question 14

Land costing $140,000 was sold for $173,000 cash. The gain on the sale was reported on the income statement as other income. On the statement of cash flows, what amount should be reported as an investing activity from the sale of land?

Accepted Answer

A)  $173,000 
B)  $140,000 
C)  $313,000 
D)  $33,000 
A)  $173,000 
B)  $140,000 
C)  $313,000 
D)  $33,000

Question 15

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 16

The order of presentation of activities on the statement of cash flows is

Accepted Answer

A)  operating, investing, and financing. 
B)  operating, financing, and investing. 
C)  financing, operating, and investing. 
D)  financing, investing, and operating. 
A)  operating, investing, and financing. 
B)  operating, financing, and investing. 
C)  financing, operating, and investing. 
D)  financing, investing, and operating.

Question 17

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.

Question 18

Cash paid to acquire treasury stock should be shown on the statement of cash flows from investing activities.

Accepted Answer

A) True 
 B)False

Question 19

Equipment with an original cost of $75,000 and accumulated depreciation of $20,000 was sold at a loss of $7,000. As a result of this transaction, cash would

Accepted Answer

A)  increase by $48,000 
B)  decrease by $7,000 
C)  increase by $55,000 
D)  decrease by $27,000 
A)  increase by $48,000 
B)  decrease by $7,000 
C)  increase by $55,000 
D)  decrease by $27,000

Question 20

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

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

Using the indirect method, if land costing $85,000 was sold for $145,000, the amount reported in the financing activities section of the statement of cash flows would be $85,000.

On the basis of the details of the common stock account presented below, calculate the total amount to be recorded in financing section of the statement of cash flows. Indicate whether the amount results in an increase or decrease in cash.

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

The statement of cash flows is not 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

If $475,000 of bonds payable are sold at 101, $475,000 would be reported in the cash flows from financing activities section of the statement of cash flows.

A company purchases equipment for $32,000 cash. This transaction should be shown on the statement of cash flows under

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

Free cash flow is the measure of operating cash flow available for corporate purposes after providing sufficient fixed asset additions to maintain current productive capacity and dividends.

Land costing $140,000 was sold for $173,000 cash. The gain on the sale was reported on the income statement as other income. On the statement of cash flows, what amount should be reported as an investing activity from the sale of land?

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

The order of presentation of activities on the statement of cash flows is

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

Cash paid to acquire treasury stock should be shown on the statement of cash flows from investing activities.

Equipment with an original cost of $75,000 and accumulated depreciation of $20,000 was sold at a loss of $7,000. As a result of this transaction, cash would

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

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Financial Statement Analysis

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Exam 16: Statement of Cash Flows

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

Using the indirect method, if land costing $85,000 was sold for $145,000, the amount reported in the financing activities section of the statement of cash flows would be $85,000.

On the basis of the details of the common stock account presented below, calculate the total amount to be recorded in financing section of the statement of cash flows. Indicate whether the amount results in an increase or decrease in cash.

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

The statement of cash flows is not 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

If $475,000 of bonds payable are sold at 101, $475,000 would be reported in the cash flows from financing activities section of the statement of cash flows.

A company purchases equipment for $32,000 cash. This transaction should be shown on the statement of cash flows under

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

Free cash flow is the measure of operating cash flow available for corporate purposes after providing sufficient fixed asset additions to maintain current productive capacity and dividends.

Land costing $140,000 was sold for $173,000 cash. The gain on the sale was reported on the income statement as other income. On the statement of cash flows, what amount should be reported as an investing activity from the sale of land?

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

The order of presentation of activities on the statement of cash flows is

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

Cash paid to acquire treasury stock should be shown on the statement of cash flows from investing activities.

Equipment with an original cost of $75,000 and accumulated depreciation of $20,000 was sold at a loss of $7,000. As a result of this transaction, cash would

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

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Financial Statement Analysis

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