Question 1

Which of the following indicates cash receipts?

Accepted Answer

A) Debit entries in the Notes Receivable account. 
B) Credit entries in the Marketable Securities account. 
C) Debit entries in the Notes Payable account. 
D) Credit entries in the Accumulated Depreciation account. 
A) Debit entries in the Notes Receivable account. 
B) Credit entries in the Marketable Securities account. 
C) Debit entries in the Notes Payable account. 
D) Credit entries in the Accumulated Depreciation account. B

Question 2

Any "non-cash" investing and financing transactions should be disclosed in a supplementary schedule accompanying a statement of cash flows.

Accepted Answer

A) True 
 B)False  True

Question 3

The statement of cash flows helps investors and creditors assess both the cash and noncash aspects of a company's investing and financing activities.

Accepted Answer

A) True 
 B)False  True

Question 4

If a company uses the indirect method to prepare its statement of cash flows,it must provide a supplementary schedule showing the computation of net cash flow from operating activities using the direct method.

Accepted Answer

A) True 
 B)False

Question 5

Deferring income taxes by using legal accounting methods is one strategy to permanently improve cash flow.

Accepted Answer

A) True 
 B)False

Question 6

All of the following are considered cash equivalents except:

Accepted Answer

A) Marketable securities. 
B) Money market funds. 
C) Commercial paper. 
D) Treasury bills. 
A) Marketable securities. 
B) Money market funds. 
C) Commercial paper. 
D) Treasury bills.

Question 7

Net income differs from net cash flows from operations because of all the following except:

Accepted Answer

A) Non-cash expenses such as depreciation. 
B) Timing differences between recognizing revenue and expenses and their cash flows. 
C) Gains and losses included in net income but classified as investing or financings activities. 
D) Non-cash expenses such as depreciation,timing differences between recognizing revenue and expenses and their cash flows,and gains and losses included in net income but classified as investing or financings activities will all cause a difference between net income and cash flows. 
A) Non-cash expenses such as depreciation. 
B) Timing differences between recognizing revenue and expenses and their cash flows. 
C) Gains and losses included in net income but classified as investing or financings activities. 
D) Non-cash expenses such as depreciation,timing differences between recognizing revenue and expenses and their cash flows,and gains and losses included in net income but classified as investing or financings activities will all cause a difference between net income and cash flows.

Question 8

Format of a cash flows statement-direct method
Arrange the following information to complete the statement of cash flows for Jericho Corporation.Place parentheses around those dollar amounts representing cash outlays.

Accepted Answer

The answer of Format of a cash flows statement-direct method
Arrange...

Question 9

Which of the following is not true regarding the direct and indirect methods of computing net cash flow from operating activities?

Accepted Answer

A) Both methods result in the same dollar amount of cash flow from operating activities. 
B) Both methods involve adjusting entries to the company's books so that the accounting records reflect the figures shown in the statement of cash flows. 
C) Both methods are acceptable to the FASB for reporting purposes. 
D) Both methods convert accrual-based income statement amounts to cash flow results. 
A) Both methods result in the same dollar amount of cash flow from operating activities. 
B) Both methods involve adjusting entries to the company's books so that the accounting records reflect the figures shown in the statement of cash flows. 
C) Both methods are acceptable to the FASB for reporting purposes. 
D) Both methods convert accrual-based income statement amounts to cash flow results.

Question 10

Which of the following would not be presented in the cash flows from operating activities section of the statement of cash flows when the direct method is used?

Accepted Answer

A) Dividends paid. 
B) Dividends received. 
C) Neither dividends paid nor dividends received would be shown. 
D) Both dividends paid and dividends received would be shown. 
A) Dividends paid. 
B) Dividends received. 
C) Neither dividends paid nor dividends received would be shown. 
D) Both dividends paid and dividends received would be shown.

Question 11

Royal Corporation uses the indirect method of computing net cash flow from operating activities and reported the following for 2015: accounts receivable decreased by $10,300,merchandise inventory increased by $15,300,accounts payable decreased by $4,000,and income taxes payable increased by $18,800.If Royal Corporation reported net income for 2015 of $157,800 (including $34,800 of depreciation expense),net cash flow from operating activities for 2015 is:

Accepted Answer

A) $202,400. 
B) $132,800. 
C) $164,800. 
D) $221,700. 
A) $202,400. 
B) $132,800. 
C) $164,800. 
D) $221,700.

Question 12

The following information was obtained from the Champion Company for the year ending December 31,20__.   Using the direct method,prepare a statement of cash flows.

Accepted Answer

The answer of The following information was obtained from the...

Question 13

Monarch Company uses the indirect method to prepare its statement of cash flows.The following information has been gathered for the current period:   On the basis of the above information only,Monarch Company's statement of cash flows shows net cash flow from operating activities to be:

Accepted Answer

A) $187,000. 
B) $333,000. 
C) $225,000. 
D) $361,000. 
A) $187,000. 
B) $333,000. 
C) $225,000. 
D) $361,000.

Question 14

The comparative balance sheets of Friends,Inc.show a net increase in accounts receivable of $650 and a net decrease in inventory of $500.To determine net cash flow from operating activities under the indirect method,net income should be:

Accepted Answer

A) Reduced by $650. 
B) Increased by $650. 
C) Reduced by $150. 
D) Increased by $150. 
A) Reduced by $650. 
B) Increased by $650. 
C) Reduced by $150. 
D) Increased by $150.

Question 15

Differences between net income and operating cash flow.
Identify three factors that may cause net income to differ from the net cash flow from operating activities.

Accepted Answer

Net income may differ from the net cash

Question 16

Based on the information provided below,complete the following worksheet to be used to prepare the statement of cash flows for the Gulp-it-Down Coffee Co.     Additional Information:
(1.)Net income for the year amounted to $60,000,and cash dividends were declared and paid in the amount of $20,000.
(2.)Gulp-it-Down Coffee Co.'s only noncash expense was depreciation which totaled $100,000.
(3.)The company purchased plant assets for $140,000.
(4.)Notes payable in the amount of $60,000 were issued during the year.

Accepted Answer

The answer of Based on the information provided below,complete the...

Question 17

In a statement of cash flows,the term cash includes both cash and cash equivalents.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is not classified among the operating activities in a statement of cash flows?

Accepted Answer

A) Payment of interest on a bank loan. 
B) Payment of the principal amount owed on a bank loan. 
C) Payment of an account payable to a merchandise supplier. 
D) Payment of income taxes. 
A) Payment of interest on a bank loan. 
B) Payment of the principal amount owed on a bank loan. 
C) Payment of an account payable to a merchandise supplier. 
D) Payment of income taxes.

Question 19

Free cash flow arises out of:

Accepted Answer

A) Operating activities. 
B) Investing activities. 
C) Financing activities. 
D) All three types of activities. 
A) Operating activities. 
B) Investing activities. 
C) Financing activities. 
D) All three types of activities.

Question 20

Rent expense in Burr Company's income statement is $480,000.If Prepaid Rent was $120,000 on January 1 and is $95,000 on December 31,the cash paid for rent during the year is:

Accepted Answer

A) $480,000. 
B) $455,000. 
C) $360,000. 
D) $575,000. 
A) $480,000. 
B) $455,000. 
C) $360,000. 
D) $575,000.

Exam 13: Statement of Cash Flows

Which of the following indicates cash receipts?

Any "non-cash" investing and financing transactions should be disclosed in a supplementary schedule accompanying a statement of cash flows.

The statement of cash flows helps investors and creditors assess both the cash and noncash aspects of a company's investing and financing activities.

If a company uses the indirect method to prepare its statement of cash flows,it must provide a supplementary schedule showing the computation of net cash flow from operating activities using the direct method.

Deferring income taxes by using legal accounting methods is one strategy to permanently improve cash flow.

All of the following are considered cash equivalents except:

Net income differs from net cash flows from operations because of all the following except:

Format of a cash flows statement-direct method Arrange the following information to complete the statement of cash flows for Jericho Corporation.Place parentheses around those dollar amounts representing cash outlays.

Which of the following is not true regarding the direct and indirect methods of computing net cash flow from operating activities?

Which of the following would not be presented in the cash flows from operating activities section of the statement of cash flows when the direct method is used?

The following information was obtained from the Champion Company for the year ending December 31,20__. Using the direct method,prepare a statement of cash flows.

Monarch Company uses the indirect method to prepare its statement of cash flows.The following information has been gathered for the current period: On the basis of the above information only,Monarch Company's statement of cash flows shows net cash flow from operating activities to be:

The comparative balance sheets of Friends,Inc.show a net increase in accounts receivable of $650 and a net decrease in inventory of $500.To determine net cash flow from operating activities under the indirect method,net income should be:

Differences between net income and operating cash flow. Identify three factors that may cause net income to differ from the net cash flow from operating activities.

In a statement of cash flows,the term cash includes both cash and cash equivalents.

Which of the following is not classified among the operating activities in a statement of cash flows?

Free cash flow arises out of:

Rent expense in Burr Company's income statement is $480,000.If Prepaid Rent was $120,000 on January 1 and is $95,000 on December 31,the cash paid for rent during the year is:

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Financial Statement Analysis

Global Business and Accounting

Management Accounting: a Business Partner

Job Order Cost Systems and Overhead Allocations

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

Forms of Business Organization

The Time Value of Money: Future Amounts and Present Values

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