Exam 12: The Statement of Cash Flows

Below is information for Fargo Corp.for 2013 and 2014: At the end of 2014,Fargo issued bonds at par value for $800,000 cash.The proceeds from these bonds were used to retire the $500,000 bond issue outstanding at the end of 2013 (before their maturity date).All interest expense was paid in cash during 2014. The following statements describe how Fargo reported the cash flow effects of the items described above on its 2014 statement of cash flows.The indirect method is used to prepare the operating activities section.Which of the following has been reported incorrectly by Fargo?

When using the indirect method,how is depreciation expense recorded on the statement of cash flows?

Which balance sheet accounts are most affected by operating activities?

Under the _______________________________,the net cash flow from operating activities is computed by adjusting net income to remove the effect of all deferrals of past operating cash receipts and payments,and all accruals of future operating cash receipts or payments.

Which of the following statements is true?

Explain where to find the information needed to determine a company's cash flow adequacy.

During 2012,the accounts payable balance of Bennington Corp.decreased.Which of the following statements is true?

Which of the following should be classified as an investing activity on the statement of cash flows?

Arizona Inc.reported the following information for 2013 and 2014. If Arizona 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?

A mortgage incurred in exchange for an office building would be reported in the statement of cash flows in

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

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

An important __________________________ activity for many companies is acquiring property.

The primary purpose of the statement of cash flows is to provide information about

The work sheet used to prepare a statement of cash flows (indirect method to determine cash flows from operating activities)should have a total in the Changes column equal to total assets.

The purchase of merchandise is an important ____________________ activity for a retailer.

When using the direct method,how is the payment of a cash dividend shown on the statement of cash flows?

Operating activities involve the acquiring and selling of goods and services for cash or on account.

Turtle Island Music Store reported net income of $200,000.Cash from operations

Which of the following statements is false?