Question 1

Negative free cash flow does not automatically signal poor performance.

Accepted Answer

A) True 
 B)False

Question 2

Adah Corporation prepares its statement of cash flows using the indirect method. Which of the following would be subtracted from net income in the operating activities section of the statement?

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 3

Excerpts from Aultman Corporation's comparative balance sheet appear below:   Which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method?

Accepted Answer

A) The change in Inventory is added to net income; The change in Accounts Payable is added to net income 
B) The change in Inventory is added to net income; The change in Accounts Payable is subtracted from net income 
C) The change in Inventory is subtracted from net income; The change in Accounts Payable is added to net income 
D) The change in Inventory is subtracted from net income; The change in Accounts Payable is subtracted from net income 
A) The change in Inventory is added to net income; The change in Accounts Payable is added to net income 
B) The change in Inventory is added to net income; The change in Accounts Payable is subtracted from net income 
C) The change in Inventory is subtracted from net income; The change in Accounts Payable is added to net income 
D) The change in Inventory is subtracted from net income; The change in Accounts Payable is subtracted from net income

Question 4

McCorey Corporation recorded the following events last year:   On the statement of cash flows, some of these events are classified as operating activities, some are classified as investing activities, and some are classified as financing activities. Based solely on the information above, the net cash provided by (used in) financing activities on the statement of cash flows would be:

Accepted Answer

A) ($70,000) 
B) $70,000 
C) ($130,000) 
D) $130,000 
A) ($70,000) 
B) $70,000 
C) ($130,000) 
D) $130,000

Question 5

Negative free cash flow suggests that the company generated enough cash flow from its operating activities to fund its capital expenditures and dividend payments.

Accepted Answer

A) True 
 B)False

Question 6

Alcoser Corporation's most recent balance sheet appears below:   Net income for the year was $60. Cash dividends were $12. The company did not dispose of any property, plant, and equipment. It did not issue any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. The net cash provided by (used in) investing activities for the year was:

Accepted Answer

A) $74 
B) ($74) 
C) ($72) 
D) $72 
A) $74 
B) ($74) 
C) ($72) 
D) $72

Question 7

Stone Retail Corporation's most recent comparative Balance Sheet is as follows:   Stone's net income was $46,000. No equipment was sold or purchased. Cash dividends of $40,000 were declared and paid. Stone uses the indirect method to prepare its statement of cash flows. What is Stone's net cash provided by (used in) financing activities?

Accepted Answer

A) ($20,000) 
B) ($15,000) 
C) $5,000 
D) $65,000 
A) ($20,000) 
B) ($15,000) 
C) $5,000 
D) $65,000

Question 8

Salsedo Corporation's balance sheet and income statement appear below:     Cash dividends were $9. The company sold equipment for $15 that was originally purchased for $10 and that had accumulated depreciation of $5. It did not issue any bonds payable or repurchase any of its own common stock. The net cash provided by (used in) operating activities for the year was:

Accepted Answer

A) $60 
B) $95 
C) $94 
D) $85 
A) $60 
B) $95 
C) $94 
D) $85

Question 9

The following events occurred last year at Dorder Corporation:   Based on the above information, the cash provided (used) by investing activities for the year on the statement of cash flows would net to:

Accepted Answer

A) ($21,000) 
B) ($12,000) 
C) ($32,000) 
D) ($69,000) 
A) ($21,000) 
B) ($12,000) 
C) ($32,000) 
D) ($69,000)

Question 10

Clayborn Corporation's net cash provided by operating activities was $111,000; its net income was $101,000; its income taxes were $43,000; its capital expenditures were $90,000; and its cash dividends were $28,000.
Required:
Determine the company's free cash flow.

Accepted Answer

Free cash flow = Net cash from

Question 11

Shoshoni Corporation prepares its statement of cash flows using the indirect method. Which of the following would be added to net income in the operating activities section of the statement?

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 12

Investing activities on the statement of cash flows generate cash inflows and outflows related to borrowing from and repaying principal to creditors and completing transactions with the company's owners such as selling or repurchasing shares of common stocks and paying dividends.

Accepted Answer

A) True 
 B)False

Question 13

The following transactions occurred last year at Jolly Corporation:   Based solely on the above information, the net cash provided by financing activities for the year on the statement of cash flows would be:

Accepted Answer

A) $179,000 
B) $59,000 
C) ($109,000) 
D) $46,000 
A) $179,000 
B) $59,000 
C) ($109,000) 
D) $46,000

Question 14

Buckley Corporation's most recent comparative balance sheet appears below:   The company's net income for the year was $91 and it paid a cash dividend of $22. It did not dispose of any property, plant, and equipment during the year. The company did not retire any bonds payable or repurchase any of its own common stock. The free cash flow for the year was:

Accepted Answer

A) ($8) 
B) $14 
C) $128 
D) $308 
A) ($8) 
B) $14 
C) $128 
D) $308

Question 15

Megan Corporation's net income last year was $98,000. Changes in the company's balance sheet accounts for the year appear below:   The company paid a cash dividend of $36,000 and it did not dispose of any long-term investments or property, plant, and equipment. The company did not issue any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. The net cash provided by (used in) investing activities last year was:

Accepted Answer

A) $115,000 
B) ($115,000) 
C) $135,000 
D) ($135,000) 
A) $115,000 
B) ($115,000) 
C) $135,000 
D) ($135,000)

Question 16

Beltram Corporation's balance sheet and income statement appear below:     The company did not dispose of any property, plant, and equipment, issue any bonds payable, or repurchase any of its own common stock during the year. The company declared and paid a cash dividend of $13.
Required:
Prepare a statement of cash flows in good form using the indirect method.

Accepted Answer

The answer of Beltram Corporation's balance sheet and income statement...

Question 17

Krech Corporation's comparative balance sheet appears below:   The company's net income (loss) for the year was ($3,000) and its cash dividends were $3,000. It did not sell or retire any property, plant, and equipment during the year. The company uses the indirect method to determine the net cash provided by operating activities. Which of the following is correct regarding the operating activities section of the statement of cash flows?

Accepted Answer

A) The change in Prepaid Expenses will be added to net income; The change in Income Taxes Payable will be subtracted from net income 
B) The change in Prepaid Expenses will be subtracted from net income; The change in Income Taxes Payable will be subtracted from net income 
C) The change in Prepaid Expenses will be subtracted from net income; The change in Income Taxes Payable will be added to net income 
D) The change in Prepaid Expenses will be added to net income; The change in Income Taxes Payable will be added to net income 
A) The change in Prepaid Expenses will be added to net income; The change in Income Taxes Payable will be subtracted from net income 
B) The change in Prepaid Expenses will be subtracted from net income; The change in Income Taxes Payable will be subtracted from net income 
C) The change in Prepaid Expenses will be subtracted from net income; The change in Income Taxes Payable will be added to net income 
D) The change in Prepaid Expenses will be added to net income; The change in Income Taxes Payable will be added to net income

Question 18

The Warrel Corporation reported the following data for last year:   Based solely on this information, the net cash provided (used) by financing activities on the statement of cash flows would be:

Accepted Answer

A) $12,000 
B) $34,000 
C) ($12,000) 
D) ($18,000) 
A) $12,000 
B) $34,000 
C) ($12,000) 
D) ($18,000)

Question 19

Furis Corporation's cash and cash equivalents consist of cash and marketable securities. Last year the company's cash account decreased by $12,000 and its marketable securities account increased by $19,000. Cash provided by operating activities was $18,000. Net cash used in financing activities was $12,000. Based on this information, the net cash flow from investing activities on the statement of cash flows was:

Accepted Answer

A) a net $12,000 decrease. 
B) a net $1,000 increase. 
C) a net $6,000 decrease. 
D) a net $6,000 increase. 
A) a net $12,000 decrease. 
B) a net $1,000 increase. 
C) a net $6,000 decrease. 
D) a net $6,000 increase.

Question 20

Autry Corporation's balance sheet and income statement appear below:     Cash dividends were $40. The company sold equipment for $19 that was originally purchased for $6 and that had accumulated depreciation of $4. The net cash provided by (used in) investing activities for the year was:

Accepted Answer

A) $19 
B) $140 
C) ($159) 
D) ($140) 
A) $19 
B) $140 
C) ($159) 
D) ($140)

Negative free cash flow does not automatically signal poor performance.

Adah Corporation prepares its statement of cash flows using the indirect method. Which of the following would be subtracted from net income in the operating activities section of the statement?

Excerpts from Aultman Corporation's comparative balance sheet appear below: Which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method?

Negative free cash flow suggests that the company generated enough cash flow from its operating activities to fund its capital expenditures and dividend payments.

The following events occurred last year at Dorder Corporation: Based on the above information, the cash provided (used) by investing activities for the year on the statement of cash flows would net to:

Clayborn Corporation's net cash provided by operating activities was $111,000; its net income was $101,000; its income taxes were $43,000; its capital expenditures were $90,000; and its cash dividends were $28,000. Required: Determine the company's free cash flow.

Shoshoni Corporation prepares its statement of cash flows using the indirect method. Which of the following would be added to net income in the operating activities section of the statement?

Investing activities on the statement of cash flows generate cash inflows and outflows related to borrowing from and repaying principal to creditors and completing transactions with the company's owners such as selling or repurchasing shares of common stocks and paying dividends.

The following transactions occurred last year at Jolly Corporation: Based solely on the above information, the net cash provided by financing activities for the year on the statement of cash flows would be:

The Warrel Corporation reported the following data for last year: Based solely on this information, the net cash provided (used) by financing activities on the statement of cash flows would be:

Autry Corporation's balance sheet and income statement appear below: Cash dividends were $40. The company sold equipment for $19 that was originally purchased for $6 and that had accumulated depreciation of $4. The net cash provided by (used in) investing activities for the year was:

Managerial Accounting and Cost Concepts

Job-Order Costing

Activity-Based Costing

Process Costing

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Master Budgeting

Flexible Budgets, Standard Costs, and Variance Analysis

Performance Measurement in Decentralized Organizations

Differential Analysis: the Key to Decision Making

Capital Budgeting Decisions

Financial Statement Analysis

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variances

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

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Exam 12: Statement of Cash Flows

Negative free cash flow does not automatically signal poor performance.

Adah Corporation prepares its statement of cash flows using the indirect method. Which of the following would be subtracted from net income in the operating activities section of the statement?

Excerpts from Aultman Corporation's comparative balance sheet appear below: Which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method?

Negative free cash flow suggests that the company generated enough cash flow from its operating activities to fund its capital expenditures and dividend payments.

The following events occurred last year at Dorder Corporation: Based on the above information, the cash provided (used) by investing activities for the year on the statement of cash flows would net to:

Clayborn Corporation's net cash provided by operating activities was $111,000; its net income was $101,000; its income taxes were $43,000; its capital expenditures were $90,000; and its cash dividends were $28,000. Required: Determine the company's free cash flow.

Shoshoni Corporation prepares its statement of cash flows using the indirect method. Which of the following would be added to net income in the operating activities section of the statement?

Investing activities on the statement of cash flows generate cash inflows and outflows related to borrowing from and repaying principal to creditors and completing transactions with the company's owners such as selling or repurchasing shares of common stocks and paying dividends.

The following transactions occurred last year at Jolly Corporation: Based solely on the above information, the net cash provided by financing activities for the year on the statement of cash flows would be:

The Warrel Corporation reported the following data for last year: Based solely on this information, the net cash provided (used) by financing activities on the statement of cash flows would be:

Autry Corporation's balance sheet and income statement appear below: Cash dividends were $40. The company sold equipment for $19 that was originally purchased for $6 and that had accumulated depreciation of $4. The net cash provided by (used in) investing activities for the year was:

Managerial Accounting and Cost Concepts

Job-Order Costing

Activity-Based Costing

Process Costing

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Master Budgeting

Flexible Budgets, Standard Costs, and Variance Analysis

Performance Measurement in Decentralized Organizations

Differential Analysis: the Key to Decision Making

Capital Budgeting Decisions

Financial Statement Analysis

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variances

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

Filters