Question 1

One area of difference between GAAP and IFRS cash flow reporting is the

Accepted Answer

A)  treatment of losses on sale of equipment 
B)  general categories required for various types of cash flows 
C)  use of the direct or indirect method of reporting operating cash flows 
D)  allowed classifications of dividend and interest paid or received 
A)  treatment of losses on sale of equipment 
B)  general categories required for various types of cash flows 
C)  use of the direct or indirect method of reporting operating cash flows 
D)  allowed classifications of dividend and interest paid or received

Question 2

In a statement of cash flows, increases or decreases in noncurrent assets are most closely associated with

Accepted Answer

A)  operating activities 
B)  investing activities 
C)  financing activities. 
D)  investing or financing activities 
A)  operating activities 
B)  investing activities 
C)  financing activities. 
D)  investing or financing activities

Question 3

Mayberry's statement of cash flow is completed using the visual inspection method. Information regarding the Mayberry Company in 2014 appears below:

What was Mayberry's net increase in cash?

Accepted Answer

A)  $190,000 
B)  $225,000 
C)  $245,000 
D)  $255,000 
A)  $190,000 
B)  $225,000 
C)  $245,000 
D)  $255,000

Question 4

In a statement of cash flows prepared by the indirect method, which of the following events would be added to net income?

Accepted Answer

A)  receipt of dividends on an available-for-sale investment 
B)  equity-method income from an investment in excess of dividends 
C)  proceeds from the sale of an available-for-sale investment 
D)  loss on the sale of plant assets 
A)  receipt of dividends on an available-for-sale investment 
B)  equity-method income from an investment in excess of dividends 
C)  proceeds from the sale of an available-for-sale investment 
D)  loss on the sale of plant assets

Question 5

On the statement of cash flows prepared using the direct method, cash paid for income taxes would be income tax expense minus

Accepted Answer

A)  an increase in income taxes payable 
B)  a decrease in income taxes payable 
C)  beginning income taxes payable 
D)  ending income taxes payable 
A)  an increase in income taxes payable 
B)  a decrease in income taxes payable 
C)  beginning income taxes payable 
D)  ending income taxes payable

Question 6

Which of the following is true concerning the direct method of calculating operating cash flows?

Accepted Answer

A)  does not tie the net income reported on a company's income statement to the net cash provided from operating activities 
B)  does not show how the changes in the elements of a company's operating cycle affected its operating cash flows 
C)  reports a company's operating cash inflows separately from its operating cash outflows 
D)  All of these choices 
A)  does not tie the net income reported on a company's income statement to the net cash provided from operating activities 
B)  does not show how the changes in the elements of a company's operating cycle affected its operating cash flows 
C)  reports a company's operating cash inflows separately from its operating cash outflows 
D)  All of these choices

Question 7

What are the four steps necessary to prepare the spreadsheet and its statement of cash flows?

Accepted Answer

1) preparing the spreadsheet
2

Question 8

Selected accounting information regarding the Chime Corporation in 2014 follows:   
In 2014, Chime should report a net increase in cash of

Accepted Answer

A)  $1,100,000 
B)  $1,200,000 
C)  $1,600,000 
D)  $1,700,000 
A)  $1,100,000 
B)  $1,200,000 
C)  $1,600,000 
D)  $1,700,000

Question 9

In order to prepare the statement of cash flows under the direct method a company will need the adjusted trial balance from the previous period.

Accepted Answer

A) True 
 B)False

Question 10

Exhibit 21-2 In preparation for completing the statement of cash flows using the spreadsheet method, Williams Company provided the following information relating to patents for 2014:

-Refer to Exhibit 21-2. The Cash Flows from Operating Activities section prepared using the indirect method would include which of the following deductions or add-back amounts related to patents?

Accepted Answer

A)  $(310) 
B)  $(290) 
C)  $ 290 
D)  $ 600 
A)  $(310) 
B)  $(290) 
C)  $ 290 
D)  $ 600

Question 11

The following are several transactions and events that might be disclosed on a company's statement of cash flows:   
Required:
Identify in which section (if any) of the statement of cash flows each of the preceding items would appear and indicate whether it would be an inflow (addition) or outflow (subtraction).

Accepted Answer

@#IMG-DLM&_TB6205_00

Question 12

Exhibit 21-1 The Raymonds Corporation reported $11,000 of net income for the current year and also uses the visual inspection method for completing the statement of cash flows. The following additional information relates to Raymonds for the year:   
-Refer to Exhibit 21-1. What is Raymonds' net cash used by financing activities?

Accepted Answer

A)  $(1,240) 
B)  $(1,650) 
C)  $(1,860) 
D)  $(2,150) 
A)  $(1,240) 
B)  $(1,650) 
C)  $(1,860) 
D)  $(2,150)

Question 13

Bernard, Inc. prepares a statement of cash flows using the visual inspection method. In 2014, Bernard had net income of $54,000. In addition, the following information is available:

What net cash provided by operating activities should Bernard report in 2014?

Accepted Answer

A)  $46,000 
B)  $72,000 
C)  $49,000 
D)  $50,000 
A)  $46,000 
B)  $72,000 
C)  $49,000 
D)  $50,000

Question 14

When preparing a statement of cash flows under the indirect method, an increase in ending accounts receivable over beginning accounts receivable will result in an adjustment to net income in the operating activities section because

Accepted Answer

A)  cash was increased since accounts receivable is a current asset 
B)  the accounts receivable increase was a revenue included in net income, but it was not a source of cash 
C)  the net increase in accounts receivable decreases net sales and represents an assumed use of cash 
D)  all changes in noncash accounts must be disclosed on the cash flow statement 
A)  cash was increased since accounts receivable is a current asset 
B)  the accounts receivable increase was a revenue included in net income, but it was not a source of cash 
C)  the net increase in accounts receivable decreases net sales and represents an assumed use of cash 
D)  all changes in noncash accounts must be disclosed on the cash flow statement

Question 15

Because the statement of cash flows only reflects the cash flows from operating, investing, and financing activities, certain noncash transactions are omitted from the body of the statement.
Required:
Identify the type of activities that are not included in the body of the statement of cash flows, describe the types of transactions involved, and indicate where these items are disclosed on the statement.

Accepted Answer

Noncash transactions related to the stat

Question 16

According to current GAAP, cash flow per share statistics

Accepted Answer

A)  should be disclosed only if EPS information is disclosed 
B)  should not be disclosed 
C)  should not be disclosed if EPS information is disclosed 
D)  should be disclosed in all situations 
A)  should be disclosed only if EPS information is disclosed 
B)  should not be disclosed 
C)  should not be disclosed if EPS information is disclosed 
D)  should be disclosed in all situations

Question 17

Angel Heating Co. reported $27,000 of net income. The company uses the visual inspection method to complete the statement of cash flows. Additional information is listed below:

The net cash provided by operating activities was

Accepted Answer

A)  $27,150 
B)  $27,100 
C)  $26,900 
D)  $26,850 
A)  $27,150 
B)  $27,100 
C)  $26,900 
D)  $26,850

Question 18

Your friend is in business and wants your advice on preparing and interpreting the statement of cash flows for 2014. Information regarding the business is as follows:  
 Required: a.Based upon the above information, prepare the statement of cash flows using the direct method.
b.Explain what has happened during the year.

Accepted Answer

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b.The student responses may vary. No in

Question 19

Exhibit 21-1 The Raymonds Corporation reported $11,000 of net income for the current year and also uses the visual inspection method for completing the statement of cash flows. The following additional information relates to Raymonds for the year:   
-Refer to Exhibit 21-1. What is Raymonds' net cash provided by investing activities?

Accepted Answer

A)  $ 250 
B)  $ 900 
C)  $2,170 
D)  $3,370 
A)  $ 250 
B)  $ 900 
C)  $2,170 
D)  $3,370

Question 20

The following information relates to the Joshua, Inc:

What is the net cash provided by operating activities?

Accepted Answer

A)  $2,100 
B)  $2,650 
C)  $3,200 
D)  $3,150 
A)  $2,100 
B)  $2,650 
C)  $3,200 
D)  $3,150

One area of difference between GAAP and IFRS cash flow reporting is the

In a statement of cash flows, increases or decreases in noncurrent assets are most closely associated with

Mayberry's statement of cash flow is completed using the visual inspection method. Information regarding the Mayberry Company in 2014 appears below: What was Mayberry's net increase in cash?

In a statement of cash flows prepared by the indirect method, which of the following events would be added to net income?

On the statement of cash flows prepared using the direct method, cash paid for income taxes would be income tax expense minus

Which of the following is true concerning the direct method of calculating operating cash flows?

What are the four steps necessary to prepare the spreadsheet and its statement of cash flows?

Selected accounting information regarding the Chime Corporation in 2014 follows: In 2014, Chime should report a net increase in cash of

In order to prepare the statement of cash flows under the direct method a company will need the adjusted trial balance from the previous period.

Bernard, Inc. prepares a statement of cash flows using the visual inspection method. In 2014, Bernard had net income of $54,000. In addition, the following information is available: What net cash provided by operating activities should Bernard report in 2014?

When preparing a statement of cash flows under the indirect method, an increase in ending accounts receivable over beginning accounts receivable will result in an adjustment to net income in the operating activities section because

According to current GAAP, cash flow per share statistics

Angel Heating Co. reported $27,000 of net income. The company uses the visual inspection method to complete the statement of cash flows. Additional information is listed below: The net cash provided by operating activities was

The following information relates to the Joshua, Inc: What is the net cash provided by operating activities?

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

Filters

Exam 21: The Statement of Cash Flows

One area of difference between GAAP and IFRS cash flow reporting is the

In a statement of cash flows, increases or decreases in noncurrent assets are most closely associated with

Mayberry's statement of cash flow is completed using the visual inspection method. Information regarding the Mayberry Company in 2014 appears below: What was Mayberry's net increase in cash?

In a statement of cash flows prepared by the indirect method, which of the following events would be added to net income?

On the statement of cash flows prepared using the direct method, cash paid for income taxes would be income tax expense minus

Which of the following is true concerning the direct method of calculating operating cash flows?

What are the four steps necessary to prepare the spreadsheet and its statement of cash flows?

Selected accounting information regarding the Chime Corporation in 2014 follows: In 2014, Chime should report a net increase in cash of

In order to prepare the statement of cash flows under the direct method a company will need the adjusted trial balance from the previous period.

Bernard, Inc. prepares a statement of cash flows using the visual inspection method. In 2014, Bernard had net income of $54,000. In addition, the following information is available: What net cash provided by operating activities should Bernard report in 2014?

When preparing a statement of cash flows under the indirect method, an increase in ending accounts receivable over beginning accounts receivable will result in an adjustment to net income in the operating activities section because

According to current GAAP, cash flow per share statistics

Angel Heating Co. reported $27,000 of net income. The company uses the visual inspection method to complete the statement of cash flows. Additional information is listed below: The net cash provided by operating activities was

The following information relates to the Joshua, Inc: What is the net cash provided by operating activities?

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

Filters