Question 1

When using the indirect method,how is the purchase of equipment for cash shown on the statement of cash flows?

Accepted Answer

A) Operating activity 
B) Investing activity 
C) Financing activity 
D) Noncash investing and financing activity 
A) Operating activity 
B) Investing activity 
C) Financing activity 
D) Noncash investing and financing activity

Question 2

Presented below is the operating activities section of the statement of cash flows for Feline Friends Corp.for 2012:   Which method of preparing the operating activities section has Feline used?

Accepted Answer

A) The direct method. 
B) The indirect method. 
C) Either method. 
D) Cannot be determined without further information. 
A) The direct method. 
B) The indirect method. 
C) Either method. 
D) Cannot be determined without further information.

Question 3

A company generated $1,830,000 from its operating activities and spent $1,200,000 on additions to its plant and equipment during the year.The total amount of debt that matures in the next five years is $900,000.Compute the company's cash flow adequacy ratio for the year.

Accepted Answer

Cash flow adequacy = (Cash fro

Question 4

Washington Corp.reported the following information for 2013 and 2014.   If Washington uses the indirect method to prepare the operating activities section of the statement of cash flows,what amount will be reported as net cash inflow from operating activities for 2014?

Accepted Answer

A) $ 73,000 
B) $ 83,000 
C) $ 95,000 
D) $105,000 
A) $ 73,000 
B) $ 83,000 
C) $ 95,000 
D) $105,000

Question 5

When using the indirect method,how is the issuance of stock to retire a long-term debt shown on a statement of cash flows?

Accepted Answer

A) Operating activity 
B) Investing activity 
C) Financing activity 
D) Noncash investing or financing activity 
A) Operating activity 
B) Investing activity 
C) Financing activity 
D) Noncash investing or financing activity

Question 6

Which of the following statements is false regarding how the cash flow effects of the changes in the equipment and accumulated depreciation accounts would be reported on a statement of cash flows if the indirect method is used to prepare the operating activities section?

Accepted Answer

A) Cash proceeds from the sale of the equipment would be reported as a cash inflow in the investing activities section. 
B) The cash paid to purchase equipment would be reported as a cash outflow in the investing activities section 
C) Depreciation expense would be added to net income in the operating activities section. 
D) A loss on the sale of the equipment would be subtracted from net income in the operating activities section 
A) Cash proceeds from the sale of the equipment would be reported as a cash inflow in the investing activities section. 
B) The cash paid to purchase equipment would be reported as a cash outflow in the investing activities section 
C) Depreciation expense would be added to net income in the operating activities section. 
D) A loss on the sale of the equipment would be subtracted from net income in the operating activities section

Question 7

Austin Corp.reported the following information for 2013 and 2014.   How much cash was received for interest during 2014?

Accepted Answer

A) $2,900 
B) $3,200 
C) $3,500 
D) $3,800 
A) $2,900 
B) $3,200 
C) $3,500 
D) $3,800

Question 8

Which of the following is not an investing activity?

Accepted Answer

A) Purchase of investments for cash. 
B) Purchase of equipment for cash. 
C) Sale of merchandise for cash. 
D) Sale of land for cash. 
A) Purchase of investments for cash. 
B) Purchase of equipment for cash. 
C) Sale of merchandise for cash. 
D) Sale of land for cash.

Question 9

The statement of cash flows

Accepted Answer

A) along with the balance sheet and income statement is prepared on the accrual basis. 
B) along with the balance sheet and statement of retained earnings is dated as of a specific year end date. 
C) along with the balance sheet is used to analyze liquidity. 
D) ties the balance sheet to the statement of retained earnings. 
A) along with the balance sheet and income statement is prepared on the accrual basis. 
B) along with the balance sheet and statement of retained earnings is dated as of a specific year end date. 
C) along with the balance sheet is used to analyze liquidity. 
D) ties the balance sheet to the statement of retained earnings.

Question 10

Upon review of Jan's Lakeside Resort statement of cash flows,the following was noted:   From this information,the most likely explanation is that Jan is

Accepted Answer

A) using cash from operations and selling long-term assets to pay back debt 
B) using cash from operations and borrowing to purchase long-term assets. 
C) using its profits to expand growth. 
D) using cash from investors to provide for operations. 
A) using cash from operations and selling long-term assets to pay back debt 
B) using cash from operations and borrowing to purchase long-term assets. 
C) using its profits to expand growth. 
D) using cash from investors to provide for operations.

Question 11

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.
What amount would be reported as the cash proceeds from the sale of equipment?

Accepted Answer

A) $2,000 
B) $3,000 
C) $5,000 
D) $8,000 
A) $2,000 
B) $3,000 
C) $5,000 
D) $8,000

Question 12

Rent expense in Volusia Company's 2014 income statement is $420,000.If Prepaid Rent was $70,000 at December 31,2013,and is $95,000 at December 31,2014,the cash paid for rent during 2014 is:

Accepted Answer

A) $480,000 
B) $445,000 
C) $395,000 
D) $420,000 
A) $480,000 
B) $445,000 
C) $395,000 
D) $420,000

Question 13

All the information needed to compute the cash flow adequacy ratio is found on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 14

The following items were reported on the balance sheets and income statement for Oxford Inc. ,a service company:   What amount would be reported in the operating activities section of the statement of cash flows for payments for operating expenses under the direct method?

Accepted Answer

A) $186,000 
B) $154,000 
C) $180,000 
D) $170,000 
A) $186,000 
B) $154,000 
C) $180,000 
D) $170,000

Question 15

Under the ______________________________,a company reports its major classes of gross cash receipts and cash payments in the operating activities section of the statement of cash flows.

Accepted Answer

The answer of Under the ______________________________,a company reports its major...

Question 16

If the balance of prepaid insurance was the same on January 1,2012,and December 31,2012,then the insurance expense would ____________________ the cash payments made for insurance during the year.

Accepted Answer

The answer of If the balance of prepaid insurance was...

Question 17

Gaulle Company began the year with a balance of $6,000 in Accounts Receivable and ended the year with $9,000 in the account.Revenues for the period amounted to $38,000.Under the direct method,Gaulle will report cash collected from customers of:

Accepted Answer

A) $44,000 
B) $35,000 
C) $41,000 
D) $47,000 
A) $44,000 
B) $35,000 
C) $41,000 
D) $47,000

Question 18

Under the indirect method,the first line in the operating activities section of the statement of cash flows is the net income or loss for the period.

Accepted Answer

A) True 
 B)False

Question 19

Use the information below for Main Street Corp.for 2013 and 2014 to answer the following question.   Assume that there were no retained earnings transactions other than those dealing with dividends and net income.How much dividends did Main Street declare during 2014?

Accepted Answer

A) $ 95,000 
B) $105,000 
C) $140,000 
D) $150,000 
A) $ 95,000 
B) $105,000 
C) $140,000 
D) $150,000

Question 20

Fairleigh Industries invested its excess cash in the following instruments during December 2012:
Certificate of deposit,due January 31,2013 $ 45,000
Certificate of deposit,due June 30,2013 95,000
Investment in City of Cleveland bonds,due May 1,2014 15,000
Investment in Techno Data stock 66,000
Money market fund 125,000
90-day Treasury bills 95,000
Treasury note,due December 1,2013 200,000
Determine the amount of cash equivalents that should be combined with cash on the company's balance sheet at December 31,2012,and for purposes of preparing a statement of cash flows for the year ended December 31,2012.

Accepted Answer

Investments made dur

When using the indirect method,how is the purchase of equipment for cash shown on the statement of cash flows?

Presented below is the operating activities section of the statement of cash flows for Feline Friends Corp.for 2012: Which method of preparing the operating activities section has Feline used?

A company generated $1,830,000 from its operating activities and spent $1,200,000 on additions to its plant and equipment during the year.The total amount of debt that matures in the next five years is $900,000.Compute the company's cash flow adequacy ratio for the year.

Washington Corp.reported the following information for 2013 and 2014. If Washington uses the indirect method to prepare the operating activities section of the statement of cash flows,what amount will be reported as net cash inflow from operating activities for 2014?

When using the indirect method,how is the issuance of stock to retire a long-term debt shown on a statement of cash flows?

Which of the following statements is false regarding how the cash flow effects of the changes in the equipment and accumulated depreciation accounts would be reported on a statement of cash flows if the indirect method is used to prepare the operating activities section?

Austin Corp.reported the following information for 2013 and 2014. How much cash was received for interest during 2014?

Which of the following is not an investing activity?

The statement of cash flows

Upon review of Jan's Lakeside Resort statement of cash flows,the following was noted: From this information,the most likely explanation is that Jan is

Rent expense in Volusia Company's 2014 income statement is $420,000.If Prepaid Rent was $70,000 at December 31,2013,and is $95,000 at December 31,2014,the cash paid for rent during 2014 is:

All the information needed to compute the cash flow adequacy ratio is found on the balance sheet.

The following items were reported on the balance sheets and income statement for Oxford Inc. ,a service company: What amount would be reported in the operating activities section of the statement of cash flows for payments for operating expenses under the direct method?

Under the ______________________________,a company reports its major classes of gross cash receipts and cash payments in the operating activities section of the statement of cash flows.

If the balance of prepaid insurance was the same on January 1,2012,and December 31,2012,then the insurance expense would ____________________ the cash payments made for insurance during the year.

Gaulle Company began the year with a balance of $6,000 in Accounts Receivable and ended the year with $9,000 in the account.Revenues for the period amounted to $38,000.Under the direct method,Gaulle will report cash collected from customers of:

Under the indirect method,the first line in the operating activities section of the statement of cash flows is the net income or loss for the period.

Use the information below for Main Street Corp.for 2013 and 2014 to answer the following question. Assume that there were no retained earnings transactions other than those dealing with dividends and net income.How much dividends did Main Street declare during 2014?

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, plant, and Equipment, and Intangibles

Current Liabilities, contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

Financial Statement Analysis

International Financial Reporting Standards

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Exam 12: The Statement of Cash Flows

When using the indirect method,how is the purchase of equipment for cash shown on the statement of cash flows?

Presented below is the operating activities section of the statement of cash flows for Feline Friends Corp.for 2012: Which method of preparing the operating activities section has Feline used?

A company generated $1,830,000 from its operating activities and spent $1,200,000 on additions to its plant and equipment during the year.The total amount of debt that matures in the next five years is $900,000.Compute the company's cash flow adequacy ratio for the year.

Washington Corp.reported the following information for 2013 and 2014. If Washington uses the indirect method to prepare the operating activities section of the statement of cash flows,what amount will be reported as net cash inflow from operating activities for 2014?

When using the indirect method,how is the issuance of stock to retire a long-term debt shown on a statement of cash flows?

Which of the following statements is false regarding how the cash flow effects of the changes in the equipment and accumulated depreciation accounts would be reported on a statement of cash flows if the indirect method is used to prepare the operating activities section?

Austin Corp.reported the following information for 2013 and 2014. How much cash was received for interest during 2014?

Which of the following is not an investing activity?

The statement of cash flows

Upon review of Jan's Lakeside Resort statement of cash flows,the following was noted: From this information,the most likely explanation is that Jan is

Rent expense in Volusia Company's 2014 income statement is $420,000.If Prepaid Rent was $70,000 at December 31,2013,and is $95,000 at December 31,2014,the cash paid for rent during 2014 is:

All the information needed to compute the cash flow adequacy ratio is found on the balance sheet.

The following items were reported on the balance sheets and income statement for Oxford Inc. ,a service company: What amount would be reported in the operating activities section of the statement of cash flows for payments for operating expenses under the direct method?

Under the ______________________________,a company reports its major classes of gross cash receipts and cash payments in the operating activities section of the statement of cash flows.

If the balance of prepaid insurance was the same on January 1,2012,and December 31,2012,then the insurance expense would ____________________ the cash payments made for insurance during the year.

Gaulle Company began the year with a balance of $6,000 in Accounts Receivable and ended the year with $9,000 in the account.Revenues for the period amounted to $38,000.Under the direct method,Gaulle will report cash collected from customers of:

Under the indirect method,the first line in the operating activities section of the statement of cash flows is the net income or loss for the period.

Use the information below for Main Street Corp.for 2013 and 2014 to answer the following question. Assume that there were no retained earnings transactions other than those dealing with dividends and net income.How much dividends did Main Street declare during 2014?

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, plant, and Equipment, and Intangibles

Current Liabilities, contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

Financial Statement Analysis

International Financial Reporting Standards

Filters