Exam 12: The Statement of Cash Flows

The issuance of common stock in exchange for a building would appear both as a cash inflow in the financing activities section of the cash flow statement and also as a cash outflow in the investing activities section.

The basic accounting equation can be restated in terms of cash by the following equation: Cash = current liabilities + long-term liabilities + capital stock - retained earnings - noncash current assets + long-term assets.

If the December 31,2012,balance of accounts receivable is higher than the January 1,2012,balance,then the amount of cash collections will be less than the sales on account for the year.

Which of the following statements is false?

Which of the following items would be considered a cash equivalent if it was held at the balance sheet date?

Use the information below for Oakland Inc.for 2013 and 2014 to answer the following question. During 2014,Oakland Inc.sold equipment with a cost of $30,000 and accumulated depreciation of $25,000.A gain of $3,000 was recognized on the sale of the equipment This was the only equipment sale during the year. Assume that all purchases of equipment were paid with cash.How much cash was paid by Oakland for the purchase of equipment during 2014?

Columbus Company prepays the rent on various office facilities.The beginning balance in Prepaid Rent was $9,500,and the ending balance was $7,200.The income statement reports Rent Expense of $45,800. Required: Under the direct method,what amount would appear for cash paid in rent in the Operating Activities section of the statement of cash flows? Show your work.

When using the indirect method,how would the declaration and payment of cash dividends be shown on the statement of cash flows?

Two methods are available to prepare the operating activities section of a statement of cash flows.Which of the following statements regarding these two methods is false?

Satir Corp.reported the following information for 2013 and 2014. How much cash was paid for salaries during 2014?

Each of the following transactions would be classified as either an investing or a financing activity except

For the statement of cash flows,companies are required to classify their cash activities into three categories: operating,investing,and borrowing.

Cash flows from operating activities usually relate to an increase or decrease in either a current asset or a current liability.

If the balance of accounts receivable decreases during the year,then cash collections will ____________________________ sales on account for the period.

Which category of cash flows - operating,investing,or financing activities - do you think is most likely to have a net cash outflow over a number of years? Explain.

Use the equation presented below to answer the question that follows: Cash = CL + LTL + CS + RE - NCCA - LTA Which of the following activities results in a cash inflow?

Many companies report cash flow per common share on the statement of cash flows.

When using the indirect method,how is the receipt of cash from the sale of long-term investments treated on the statement of cash flows?

A decrease in retained earnings represents dividends that were ___________________ during the period,not necessarily those that were paid.

Klein Corp.acquired land by issuing its common stock.How should this transaction be disclosed when a statement of cash flows is prepared?