Question 1

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

Accepted Answer

A)  receipts from the issuance of capital stock 
B)  receipts from the sale of investments 
C)  payments for the acquisition of investments 
D)  cash receipts from sales activities 
A)  receipts from the issuance of capital stock 
B)  receipts from the sale of investments 
C)  payments for the acquisition of investments 
D)  cash receipts from sales activities

Question 2

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 3

The statement of cash flows reports a firm's major sources of cash receipts and major uses of cash payments for a period.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A)  receipts from the issuance of capital stock 
B)  payment for interest on short-term notes payable 
C)  payments for the purchase of investments 
D)  payments for cash dividends 
A)  receipts from the issuance of capital stock 
B)  payment for interest on short-term notes payable 
C)  payments for the purchase of investments 
D)  payments for cash dividends

Question 5

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

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Question 6

Sales for the year were $600,000. Accounts receivable were $100,000 and $80,000 at the beginning and end of the year. Cash received from customers to be reported on the cash flow statement using the direct method is

Accepted Answer

A)  $700,000 
B)  $600,000 
C)  $580,000 
D)  $620,000 
A)  $700,000 
B)  $600,000 
C)  $580,000 
D)  $620,000

Question 7

The statement of cash flows is not useful for:

Accepted Answer

A)  planning future investing and financing activities 
B)  determining a company's ability to pay its debts 
C)  determining a company's ability to pay dividends 
D)  calculating the net worth of a company 
A)  planning future investing and financing activities 
B)  determining a company's ability to pay its debts 
C)  determining a company's ability to pay dividends 
D)  calculating the net worth of a company

Question 8

A building with a book value of $54,000 is sold for $63,000 cash Using the indirect method, this transaction should be shown on the statement of cash flows as follows:

Accepted Answer

A)  an increase of $54,000 from investing activities 
B)  an increase of $63,000 from investing activities and a deduction from net income of $9,000 
C)  an increase of $9,000 from investing activities 
D)  an increase of $54,000 from investing activities and an addition to net income of $9,000 
A)  an increase of $54,000 from investing activities 
B)  an increase of $63,000 from investing activities and a deduction from net income of $9,000 
C)  an increase of $9,000 from investing activities 
D)  an increase of $54,000 from investing activities and an addition to net income of $9,000

Question 9

The direct method of preparing the operating activities section of the statement of cash flows reports major classes of gross cash receipts and gross cash payments.

Accepted Answer

A) True 
 B)False

Question 10

The net income reported on the income statement for the current year was $275,000. Depreciation recorded on fixed assets and amortization of patents for the year were $40,000 and $9,000, respectively. Balances of current asset and current liability accounts at the end and at the beginning of the year are as follows:   What is the amount of cash flows from operating activities reported on the statement of cash flows prepared by the indirect method?

Accepted Answer

A)  $198,000 
B)  $324,000 
C)  $352,000 
D)  $296,000 
A)  $198,000 
B)  $324,000 
C)  $352,000 
D)  $296,000

Question 11

Which of the following is not one of the four basic financial statements?

Accepted Answer

A)  balance sheet 
B)  statement of cash flows 
C)  statement of changes in financial position 
D)  income statement 
A)  balance sheet 
B)  statement of cash flows 
C)  statement of changes in financial position 
D)  income statement

Question 12

Cash inflows and outflows are netted in the investing or financing sections of the statement of cash flows but are separately disclosed to give the reader full information.

Accepted Answer

A) True 
 B)False

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

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Question 14

Free cash flow is

Accepted Answer

A)  all cash in the bank 
B)  cash from operations 
C)  cash from financing, less cash used to purchase fixed assets to maintain productive capacity and cash used for dividends 
D)  cash flow from operations, less cash used to purchase fixed assets to maintain productive capacity and cash used for dividends 
A)  all cash in the bank 
B)  cash from operations 
C)  cash from financing, less cash used to purchase fixed assets to maintain productive capacity and cash used for dividends 
D)  cash flow from operations, less cash used to purchase fixed assets to maintain productive capacity and cash used for dividends

Question 15

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

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Question 16

State the section(s) of the statement of cash flows prepared by the indirect method (operating activities, investing activities, financing activities, or not reported) and the amount that would be reported for each of the following transactions:

Accepted Answer

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Question 17

The following information is available from the current period financial statements:   The net cash flow from operating activities using the indirect method is

Accepted Answer

A)  $230,000 
B)  $188,000 
C)  $198,000 
D)  $156,000 
A)  $230,000 
B)  $188,000 
C)  $198,000 
D)  $156,000

Question 18

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 19

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 20

Cash paid for equipment would be reported in the statement of cash flows in

Accepted Answer

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

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

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.

The statement of cash flows reports a firm's major sources of cash receipts and major uses of cash payments for a period.

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

Sales for the year were $600,000. Accounts receivable were $100,000 and $80,000 at the beginning and end of the year. Cash received from customers to be reported on the cash flow statement using the direct method is

The statement of cash flows is not useful for:

A building with a book value of $54,000 is sold for $63,000 cash Using the indirect method, this transaction should be shown on the statement of cash flows as follows:

The direct method of preparing the operating activities section of the statement of cash flows reports major classes of gross cash receipts and gross cash payments.

Which of the following is not one of the four basic financial statements?

Cash inflows and outflows are netted in the investing or financing sections of the statement of cash flows but are separately disclosed to give the reader full information.

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.

Free cash flow 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.

State the section(s) of the statement of cash flows prepared by the indirect method (operating activities, investing activities, financing activities, or not reported) and the amount that would be reported for each of the following transactions:

The following information is available from the current period financial statements: The net cash flow from operating activities using the indirect method is

Cash receipts from interest and dividends are classified as

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

Cash paid for equipment would be reported in the statement of cash flows in

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

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

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.

The statement of cash flows reports a firm's major sources of cash receipts and major uses of cash payments for a period.

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

Sales for the year were $600,000. Accounts receivable were $100,000 and $80,000 at the beginning and end of the year. Cash received from customers to be reported on the cash flow statement using the direct method is

The statement of cash flows is not useful for:

A building with a book value of $54,000 is sold for $63,000 cash Using the indirect method, this transaction should be shown on the statement of cash flows as follows:

The direct method of preparing the operating activities section of the statement of cash flows reports major classes of gross cash receipts and gross cash payments.

Which of the following is not one of the four basic financial statements?

Cash inflows and outflows are netted in the investing or financing sections of the statement of cash flows but are separately disclosed to give the reader full information.

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.

Free cash flow 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.

State the section(s) of the statement of cash flows prepared by the indirect method (operating activities, investing activities, financing activities, or not reported) and the amount that would be reported for each of the following transactions:

The following information is available from the current period financial statements: The net cash flow from operating activities using the indirect method is

Cash receipts from interest and dividends are classified as

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

Cash paid for equipment would be reported in the statement of cash flows in

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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