Question 1

Typical cash flows from investing activities include:

Accepted Answer

A)  Payments to purchase property, plant and equipment or other productive assets (excluding inventory). 
B)  Proceeds from collecting the principal amount of notes receivable arising from customer sales. 
C)  Proceeds from collecting the principal amount of notes receivable arising from intercompany transactions. 
D)  Payments to acquire held-to maturity securities of other entities, except cash equivalents. 
E)  Proceeds from the sale of equipment. 
A)  Payments to purchase property, plant and equipment or other productive assets (excluding inventory). 
B)  Proceeds from collecting the principal amount of notes receivable arising from customer sales. 
C)  Proceeds from collecting the principal amount of notes receivable arising from intercompany transactions. 
D)  Payments to acquire held-to maturity securities of other entities, except cash equivalents. 
E)  Proceeds from the sale of equipment.

Question 2

Based on the information in the following income statement and balance sheet for Montego Bay Corporation, determine the cash flows from operating activities using the direct method.

Accepted Answer

The answer of Based on the information in the following...

Question 3

Accounting standards:

Accepted Answer

A)  Allow companies to omit the statement of cash flows from a complete set of financial statements if cash is an insignificant asset. 
B)  Require that companies omit the statement of cash flows from a complete set of financial statements if the company has no investing activities. 
C)  Require that companies include a statement of cash flows in a complete set of financial statements. 
D)  Allow companies to include the statement of cash flows in a complete set of financial statements if the cash balance makes up more than 50% of the current assets. 
E)  Allow companies to omit the statement of cash flows from a complete set of financial statements if the company has no financing activities. 
A)  Allow companies to omit the statement of cash flows from a complete set of financial statements if cash is an insignificant asset. 
B)  Require that companies omit the statement of cash flows from a complete set of financial statements if the company has no investing activities. 
C)  Require that companies include a statement of cash flows in a complete set of financial statements. 
D)  Allow companies to include the statement of cash flows in a complete set of financial statements if the cash balance makes up more than 50% of the current assets. 
E)  Allow companies to omit the statement of cash flows from a complete set of financial statements if the company has no financing activities.

Question 4

Woodlawn Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: Retained earnings balance at the beginning of the year $233,000
Cash dividends declared for the year $50,000
Proceeds from the sale of equipment $85,000
Gain on the sale of equipment $4,500
Cash dividends payable at the beginning of the year $22,000
Cash dividends payable at the end of the year $30,000
Net income for the year $110,000
The ending balance in retained earnings is:

Accepted Answer

A)  $343,000. 
B)  $213,000. 
C)  $293,000. 
D)  $297,500. 
E)  $301,000. 
A)  $343,000. 
B)  $213,000. 
C)  $293,000. 
D)  $297,500. 
E)  $301,000.

Question 5

An investment that is readily convertible to a known amount of cash and that is sufficiently close to its maturity date so that its market value is relatively insensitive to interest rate changes is a(n):

Accepted Answer

A)  Short-term marketable equity security. 
B)  Operating activity. 
C)  Ordinary share. 
D)  Cash equivalent. 
E)  Financing activity. 
A)  Short-term marketable equity security. 
B)  Operating activity. 
C)  Ordinary share. 
D)  Cash equivalent. 
E)  Financing activity.

Question 6

A company's Inventory balance at 12/31/11 was $188,000 and $200,000 at 12/31/10. Its Accounts Payable balance at 12/31/11 was $84,000 and $80,000 at 12/31/10, and its cost of goods sold for 2011 was $720,000. The company's total amount of cash payments for merchandise in 2011 equals:

Accepted Answer

A)  $704,000. 
B)  $712,000. 
C)  $720,000. 
D)  $728,000. 
E)  $736,000. 
A)  $704,000. 
B)  $712,000. 
C)  $720,000. 
D)  $728,000. 
E)  $736,000.

Question 7

What are the five usual steps involved in the preparation of the statement of cash flows?

Accepted Answer

The preparation of the statement of cash

Question 8

A company had net cash flows from operations of $120,000, cash flows from financing of $330,000, total cash flows of $500,000, and average total assets of $2,500,000. The cash flow on total assets ratio equals:

Accepted Answer

A)  4.8%. 
B)  5.0%. 
C)  20.0%. 
D)  20.8%. 
E)  24.0%. 
A)  4.8%. 
B)  5.0%. 
C)  20.0%. 
D)  20.8%. 
E)  24.0%.

Question 9

A cash-based measure to help business decision makers estimate the amount and timing of cash flows is the cash flow on total assets ratio.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following transactions or events should be reported as a source of cash from operating activities when using the direct method?

Accepted Answer

A)  Credit sales. 
B)  Cash collections from customers. 
C)  Depreciation expense. 
D)  Cash received from the sale of a building. 
E)  Cash received from the sale of treasury shares. 
A)  Credit sales. 
B)  Cash collections from customers. 
C)  Depreciation expense. 
D)  Cash received from the sale of a building. 
E)  Cash received from the sale of treasury shares.

Question 11

The following selected account balances are taken from a merchandising company's records:
(a) Calculate the cash payments made during 2011 for merchandise. Assume all of the company's accounts payable balances result from merchandise purchases.
(b) Calculate the cash receipts from customer sales during 2011.
(c) Calculate the cash payments for salaries during 2011.

Accepted Answer

The answer of The following selected account balances are taken...

Question 12

The accountant for Robinson Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: What is the ending balance for retained earnings?

Accepted Answer

A)  $276,000. 
B)  $202,000. 
C)  $254,000. 
D)  $248,000. 
E)  $174,000. 
A)  $276,000. 
B)  $202,000. 
C)  $254,000. 
D)  $248,000. 
E)  $174,000.

Question 13

Managers only use the statement of cash flows to evaluate the net cash increase or decrease, and do not pay much attention to the details of cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities.

Accepted Answer

A) True 
 B)False

Question 14

The accountant for Robinson Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: The amount of cash dividends paid during the year would be:

Accepted Answer

A)  $70,000. 
B)  $46,000. 
C)  $22,000. 
D)  $39,000. 
E)  $24,000. 
A)  $70,000. 
B)  $46,000. 
C)  $22,000. 
D)  $39,000. 
E)  $24,000.

Question 15

Based on the following income statement and balance sheet for Rashid Corporation, determine the cash flows from operating activities using the indirect method.

Accepted Answer

The answer of Based on the following income statement and...

Question 16

Probably the most important section of the statement of cash flows in analyzing the financial performance of a company's ongoing business is the ____________ section.

Accepted Answer

Operating

Question 17

Investing activities include: (a) the purchase and sale of long-term assets, (b) lending and collecting on notes receivable, and (c) the purchase and sale of short-term investments in the securities of other entities, other than contracts held for dealing or trading purposes.

Accepted Answer

A) True 
 B)False

Question 18

The statement of cash flows is divided into three sections called the ___________, ___________, and _______________ sections.

Accepted Answer

Operating,

Question 19

Which one of the following is representative of typical cash flows from operating activities?

Accepted Answer

A)  Proceeds from collecting the principal amounts of loans. 
B)  Repayment of principals on loans. 
C)  Proceeds from the issuance of bonds and notes payable. 
D)  Payments by a merchandiser to acquire equity securities of other companies. 
E)  Receipts of cash sales. 
A)  Proceeds from collecting the principal amounts of loans. 
B)  Repayment of principals on loans. 
C)  Proceeds from the issuance of bonds and notes payable. 
D)  Payments by a merchandiser to acquire equity securities of other companies. 
E)  Receipts of cash sales.

Question 20

Equipment costing $100,000 with accumulated depreciation of $40,000 is sold at a loss of $10,000. This implies that $40,000 cash was received from the sale.
Cost of asset $100,000
Accumulated depreciation 40,000
Carrying amount 60,000
Loss on sale (10,000)
Cash received $ 50,000

Accepted Answer

A) True 
 B)False

Exam 16: Statement of Cash Flows

Typical cash flows from investing activities include:

Based on the information in the following income statement and balance sheet for Montego Bay Corporation, determine the cash flows from operating activities using the direct method.

Accounting standards:

An investment that is readily convertible to a known amount of cash and that is sufficiently close to its maturity date so that its market value is relatively insensitive to interest rate changes is a(n):

A company's Inventory balance at 12/31/11 was $188,000 and $200,000 at 12/31/10. Its Accounts Payable balance at 12/31/11 was $84,000 and $80,000 at 12/31/10, and its cost of goods sold for 2011 was $720,000. The company's total amount of cash payments for merchandise in 2011 equals:

What are the five usual steps involved in the preparation of the statement of cash flows?

A company had net cash flows from operations of $120,000, cash flows from financing of $330,000, total cash flows of $500,000, and average total assets of $2,500,000. The cash flow on total assets ratio equals:

A cash-based measure to help business decision makers estimate the amount and timing of cash flows is the cash flow on total assets ratio.

Which of the following transactions or events should be reported as a source of cash from operating activities when using the direct method?

The accountant for Robinson Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: What is the ending balance for retained earnings?

Managers only use the statement of cash flows to evaluate the net cash increase or decrease, and do not pay much attention to the details of cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities.

The accountant for Robinson Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: The amount of cash dividends paid during the year would be:

Based on the following income statement and balance sheet for Rashid Corporation, determine the cash flows from operating activities using the indirect method.

Probably the most important section of the statement of cash flows in analyzing the financial performance of a company's ongoing business is the ____________ section.

Investing activities include: (a) the purchase and sale of long-term assets, (b) lending and collecting on notes receivable, and (c) the purchase and sale of short-term investments in the securities of other entities, other than contracts held for dealing or trading purposes.

The statement of cash flows is divided into three sections called the ___________, ___________, and _______________ sections.

Which one of the following is representative of typical cash flows from operating activities?

Equipment costing $100,000 with accumulated depreciation of $40,000 is sold at a loss of $10,000. This implies that $40,000 cash was received from the sale. Cost of asset $100,000 Accumulated depreciation 40,000 Carrying amount 60,000 Loss on sale (10,000) Cash received $ 50,000

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Long-Term Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Filters

The statement of cash flows is divided into three sections called the _____, _, and ___________ sections.