Question 1

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 2

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

Accepted Answer

A)  depreciation expense 
B)  gain on sale of land 
C)  a loss on the sale of equipment 
D)  dividends declared and paid 
A)  depreciation expense 
B)  gain on sale of land 
C)  a loss on the sale of equipment 
D)  dividends declared and paid

Question 3

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 4

For each of the following, identify whether it would be disclosed as an operating (O), financing (F), or investing (I) activity on the statement of cash flows under the indirect method.

Accepted Answer

The answer of For each of the following, identify whether...

Question 5

Sales reported on the income statement were $372,000. The accounts receivable balance declined $4,500 over the year. The amount of cash received from customers was $367,500.

Accepted Answer

A) True 
 B)False

Question 6

The net income reported on an income statement for the current year was $58,000. Depreciation recorded on fixed assets for the year was $24,000. Balances of the current asset and current liability accounts at the end and beginning of the year are listed below. Prepare the cash flows from operating activities section of a statement of cash flows using the indirect method.

Accepted Answer

The answer of The net income reported on an income...

Question 7

Cost of merchandise sold reported on the income statement was $155,000. The accounts payable balance increased $5,000, and the inventory balance increased by $11,000 over the year. Determine the amount of cash paid for merchandise?

Accepted Answer

The answer of Cost of merchandise sold reported on the...

Question 8

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. 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

The answer of The Dickinson Company reported net income of...

Question 9

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 10

Which of the following concepts of cash is not appropriate to use in preparing the statement of cash flows?

Accepted Answer

A)  cash 
B)  cash and money market funds 
C)  cash and cash equivalents 
D)  cash and U.S. treasury bonds 
A)  cash 
B)  cash and money market funds 
C)  cash and cash equivalents 
D)  cash and U.S. treasury bonds

Question 11

Cash flows from financing activities, as part of the statement of cash flows, include payments for dividends.

Accepted Answer

A) True 
 B)False

Question 12

Cash flows from investing activities, as part of the statement of cash flows, include receipts from the sale of land.

Accepted Answer

A) True 
 B)False

Question 13

The net income reported on an income statement for the current year was $63,000. Depreciation recorded on fixed assets for the year was $24,000. Balances of the current asset and current liability accounts at the end and beginning of the year are listed below. Prepare the cash flows from operating activities section of a statement of cash flows using the indirect method.

Accepted Answer

The answer of The net income reported on an income...

Question 14

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 15

Accounts receivable from sales to customers amounted to $40,000 and $32,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $110,000. 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)  $118,000. 
B)  $110,000. 
C)  $102,000. 
D)  $150,000. 
A)  $118,000. 
B)  $110,000. 
C)  $102,000. 
D)  $150,000.

Question 16

Accounts receivable from sales transactions were $44,000 at the beginning of the year and $53,000 at the end of the year. Net income reported on the income statement for the year was $105,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows prepared by the indirect method is

Accepted Answer

A)  $105,000 
B)  $114,000 
C)  $96,000 
D)  $158,000 
A)  $105,000 
B)  $114,000 
C)  $96,000 
D)  $158,000

Question 17

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 18

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 19

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 20

The cash flows from operating activities are reported by the direct method on the statement of cash flows. Determine the following:

Accepted Answer

The answer of The cash flows from operating activities are...

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

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

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.

For each of the following, identify whether it would be disclosed as an operating (O), financing (F), or investing (I) activity on the statement of cash flows under the indirect method.

Sales reported on the income statement were $372,000. The accounts receivable balance declined $4,500 over the year. The amount of cash received from customers was $367,500.

Cost of merchandise sold reported on the income statement was $155,000. The accounts payable balance increased $5,000, and the inventory balance increased by $11,000 over the year. Determine the amount of cash paid for merchandise?

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.

Which of the following concepts of cash is not appropriate to use in preparing the statement of cash flows?

Cash flows from financing activities, as part of the statement of cash flows, include payments for dividends.

Cash flows from investing activities, as part of the statement of cash flows, include receipts from the sale of land.

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.

Free cash flow is

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

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 cash flows from operating activities are reported by the direct method on the statement of cash flows. Determine the following:

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

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Exam 14: Statement of Cash Flows

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

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

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.

For each of the following, identify whether it would be disclosed as an operating (O), financing (F), or investing (I) activity on the statement of cash flows under the indirect method.

Sales reported on the income statement were $372,000. The accounts receivable balance declined $4,500 over the year. The amount of cash received from customers was $367,500.

Cost of merchandise sold reported on the income statement was $155,000. The accounts payable balance increased $5,000, and the inventory balance increased by $11,000 over the year. Determine the amount of cash paid for merchandise?

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.

Which of the following concepts of cash is not appropriate to use in preparing the statement of cash flows?

Cash flows from financing activities, as part of the statement of cash flows, include payments for dividends.

Cash flows from investing activities, as part of the statement of cash flows, include receipts from the sale of land.

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.

Free cash flow is

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

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 cash flows from operating activities are reported by the direct method on the statement of cash flows. Determine the following:

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

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