Question 1

Which of the following events would be classified as an investing activity on a statement of cash flows?

Accepted Answer

A)  payment of interest on a loan 
B)  receipt of cash dividends on an available-for-sale investment 
C)  issuance of common stock 
D)  sale of an office building at a gain 
A)  payment of interest on a loan 
B)  receipt of cash dividends on an available-for-sale investment 
C)  issuance of common stock 
D)  sale of an office building at a gain

Question 2

In a statement of cash flows prepared by the indirect method, an increase in accounts receivable should be

Accepted Answer

A)  deducted from net income in the operating activities section 
B)  added to net income in the operating activities section 
C)  reported as an inflow in the investing activities section 
D)  reported as an inflow in the financing activities section 
A)  deducted from net income in the operating activities section 
B)  added to net income in the operating activities section 
C)  reported as an inflow in the investing activities section 
D)  reported as an inflow in the financing activities section

Question 3

The following is a list of items to be included in the 2014 statement of cash flows for the Winter Company:   Required:
Prepare the 2014 statement of cash flows using the visual method.

Accepted Answer

The answer of The following is a list of items...

Question 4

What is the primary purpose of the statement of cash flows and what if used with information in the other financial statements does it help external users?

Accepted Answer

The primary purpose of the statement of

Question 5

Why do companies use the spreadsheet method to prepare the statements of cash flows?

Accepted Answer

1) record its cash receipts and payments

Question 6

On September 4, 2014, Chester Fish Company purchased 1000 shares of Christopher Company common stock for $76 per share as a short-term investment in securities classified as available-for-sale. On December 31, 2014, the stock had a fair value of $72 per share, and on March 10, 2015, Chester sold the stock for $80 per share.
Required:
In journal entry form, prepare the spreadsheet entries to record these transactions for Chester Fish Company's 2014 and 2015 statement of cash flows.

Accepted Answer

@#IMG-DLM& 
Allowance for Change in Valu

Question 7

What is the primary purpose of a company's statement of cash flows?

Accepted Answer

A)  to provide information about the company's operations 
B)  to provide information about the company's dividend policy 
C)  to provide information about the company's financing and investing activities 
D)  to provide information about the company's cash receipts and cash payments during the period 
A)  to provide information about the company's operations 
B)  to provide information about the company's dividend policy 
C)  to provide information about the company's financing and investing activities 
D)  to provide information about the company's cash receipts and cash payments during the period

Question 8

A company had an increase in interest payable during the year and also amortized discount on bonds payable. Under the direct method, the amount of interest paid during the year to be reflected in the statement of cash flows is

Accepted Answer

A)  interest expense plus the increase in interest payable minus the discount amortization 
B)  interest expense plus the increase in interest payable plus the discount amortization 
C)  interest expense minus the increase in interest payable minus the discount amortization 
D)  interest expense minus the increase in interest payable plus the discount amortization 
A)  interest expense plus the increase in interest payable minus the discount amortization 
B)  interest expense plus the increase in interest payable plus the discount amortization 
C)  interest expense minus the increase in interest payable minus the discount amortization 
D)  interest expense minus the increase in interest payable plus the discount amortization

Question 9

Accounting information from the records of the Sarah Jane's Clothing Corporation at the end of 2014 is shown below:   
Required:
Prepare Sarah Jane's Clothing 's 2014 Net Cash Flow from Operating Activities section of a statement of cash flows, using the indirect method.

Accepted Answer

The answer of Accounting information from the records of the...

Question 10

When reading the Cash Outflows from Operating Activities portion of the statement of cash flows, you would expect to find which of the following?

Accepted Answer

A)  I, II, III, and V 
B)  I, III, IV, and VI 
C)  I, II, III, IV, V, and VI 
D)  I, III, IV, VI, and V 
A)  I, II, III, and V 
B)  I, III, IV, and VI 
C)  I, II, III, IV, V, and VI 
D)  I, III, IV, VI, and V

Question 11

The IFRS categories of cash flows are

Accepted Answer

A)  long-term changes and short-term changes 
B)  operating and other 
C)  operating, investing, and financing 
D)  operating and nonoperating 
A)  long-term changes and short-term changes 
B)  operating and other 
C)  operating, investing, and financing 
D)  operating and nonoperating

Question 12

The following information relates to the Fowler Company for 2014:

What was the amount of cash sales?

Accepted Answer

A)  $61,200 
B)  $59,800 
C)  $63,800 
D)  $65,200 
A)  $61,200 
B)  $59,800 
C)  $63,800 
D)  $65,200

Question 13

Under the direct method, which one of the following would represent cash paid?

Accepted Answer

A)  gains on sales of plant assets 
B)  losses on sales of plant assets 
C)  depreciation expense, adjusted for changes in depreciation methods 
D)  interest expense, adjusted for changes in interest payable and amortization of bond premium or discount 
A)  gains on sales of plant assets 
B)  losses on sales of plant assets 
C)  depreciation expense, adjusted for changes in depreciation methods 
D)  interest expense, adjusted for changes in interest payable and amortization of bond premium or discount

Question 14

A company's unearned rental revenue account increases from the beginning to the end of the year. In the statement of cash flows using the direct method, the cash collected from tenants would be

Accepted Answer

A)  rent revenue plus unearned rent revenue at the beginning of the year 
B)  rent revenue plus the increase in unearned rent revenue during the year 
C)  rent revenue minus the increase in unearned rent revenue during the year 
D)  equal to rental revenue on the income statement 
A)  rent revenue plus unearned rent revenue at the beginning of the year 
B)  rent revenue plus the increase in unearned rent revenue during the year 
C)  rent revenue minus the increase in unearned rent revenue during the year 
D)  equal to rental revenue on the income statement

Question 15

What working paper information does a company need for its statement of cash flows under the direct method?

Accepted Answer

1) Post-closing trial balance from previ

Question 16

Generating positive cash flows from operations is one of the most important cash flow activities of a company.

Accepted Answer

A) True 
 B)False

Question 17

Treatments of items in the cash flow statement that differ between IFRS and GAAP include all of the following except the allowed treatment of

Accepted Answer

A)  any cash outflows for development costs that were capitalized as intangible assets 
B)  losses on the early retirement of bonds 
C)  bank overdrafts 
D)  income taxes related to financing and investing activities 
A)  any cash outflows for development costs that were capitalized as intangible assets 
B)  losses on the early retirement of bonds 
C)  bank overdrafts 
D)  income taxes related to financing and investing activities

Question 18

The Roberts Company reported net income of $190,000 in 2014. Additional information follows:

Given just this information, what was the Roberts Company's net cash provided by operating activities in 2014?

Accepted Answer

A)  $115,000 
B)  $169,000 
C)  $211,000 
D)  $162,000 
A)  $115,000 
B)  $169,000 
C)  $211,000 
D)  $162,000

Question 19

What are the three categories of cash inflows from operating activities under the direct method?

Accepted Answer

1) collections from

Question 20

Which of the following items would be deducted from net income to determine net cash provided by operating activities using the direct method?

Accepted Answer

A)  loss on sale of plant assets and amortization of bond payable discount 
B)  amortization of bond payable premium and gain on sale of equipment 
C)  amortization expense and gain on sale of equipment 
D)  None of these choices 
A)  loss on sale of plant assets and amortization of bond payable discount 
B)  amortization of bond payable premium and gain on sale of equipment 
C)  amortization expense and gain on sale of equipment 
D)  None of these choices

Exam 21: The Statement of Cash Flows

Which of the following events would be classified as an investing activity on a statement of cash flows?

In a statement of cash flows prepared by the indirect method, an increase in accounts receivable should be

The following is a list of items to be included in the 2014 statement of cash flows for the Winter Company: Required: Prepare the 2014 statement of cash flows using the visual method.

What is the primary purpose of the statement of cash flows and what if used with information in the other financial statements does it help external users?

Why do companies use the spreadsheet method to prepare the statements of cash flows?

What is the primary purpose of a company's statement of cash flows?

A company had an increase in interest payable during the year and also amortized discount on bonds payable. Under the direct method, the amount of interest paid during the year to be reflected in the statement of cash flows is

Accounting information from the records of the Sarah Jane's Clothing Corporation at the end of 2014 is shown below: Required: Prepare Sarah Jane's Clothing 's 2014 Net Cash Flow from Operating Activities section of a statement of cash flows, using the indirect method.

When reading the Cash Outflows from Operating Activities portion of the statement of cash flows, you would expect to find which of the following?

The IFRS categories of cash flows are

The following information relates to the Fowler Company for 2014: What was the amount of cash sales?

Under the direct method, which one of the following would represent cash paid?

A company's unearned rental revenue account increases from the beginning to the end of the year. In the statement of cash flows using the direct method, the cash collected from tenants would be

What working paper information does a company need for its statement of cash flows under the direct method?

Generating positive cash flows from operations is one of the most important cash flow activities of a company.

Treatments of items in the cash flow statement that differ between IFRS and GAAP include all of the following except the allowed treatment of

The Roberts Company reported net income of $190,000 in 2014. Additional information follows: Given just this information, what was the Roberts Company's net cash provided by operating activities in 2014?

What are the three categories of cash inflows from operating activities under the direct method?

Which of the following items would be deducted from net income to determine net cash provided by operating activities using the direct method?

The Demand for and Supply of Financial Accounting Information

Financial Reporting: Its Conceptual Framework

Review of a Companys Accounting System

The Balance Sheet and the Statement of Shareholders Equity

The Income Statement and the Statement of Cash Flows

Cash and Receivables

Inventories: Cost Measurement and Flow Assumptions

Inventories: Special Valuation Issues

Current Liabilities and Contingencies

Property, Plant, and Equipment: Acquisition and Subsequent Investments

Depreciation, Depletion, Impairment, and Disposal

Intangibles

Investments and Long-Term Receivables

Financing Liabilities: Bonds and Notes Payable

Contributed Capital

Retained Earnings and Earnings Per Share

Advanced Issues in Revenue Recognition

Accounting for Income Taxes

Accounting for Postretirement Benefits

Accounting for Leases

Accounting for Changes and Errors

Time Value of Money Module

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