Question 1

For each of the following separate cases, use the information provided to calculate the missing cash inflow or cash outflow using the direct method.

Accepted Answer

The answer of For each of the following separate cases,...

Question 2

Investing activities include the:

Accepted Answer

A)  Purchase of property, plant and equipment. 
B)  Lending on notes receivable. 
C)  Collecting on notes receivable. 
D)  Sale of property, plant and equipment. 
E)  All of these. 
A)  Purchase of property, plant and equipment. 
B)  Lending on notes receivable. 
C)  Collecting on notes receivable. 
D)  Sale of property, plant and equipment. 
E)  All of these.

Question 3

Trenton reports tax-exempt income of $230,000 for the year ended December 31, Year 2. It also reports $87,700 depreciation expense and a $5,000 gain on the sale of equipment. Its comparative balance sheet reveals a $35,500 decrease in accounts receivable, a $15,750 increase in accounts payable, and a $12,500 decrease in wages payable. Calculate the new cash provided (used) in operating activities using the indirect method.

Accepted Answer

A)  $376,450. 
B)  $351,450. 
C)  $356,450. 
D)  $319,950. 
E)  $263,750. 
A)  $376,450. 
B)  $351,450. 
C)  $356,450. 
D)  $319,950. 
E)  $263,750.

Question 4

Sebring Company reports depreciation expense of $40,000 for Year 2. Also, equipment costing $140,000 was sold for its carrying amount in Year 2. The following selected information is available for Sebring Company from its comparative balance sheets. Compute the cash received from the sale of the equipment.

Accepted Answer

A)  $72,000. 
B)  $68,000. 
C)  $28,000. 
D)  $40,000. 
E)  $36,000. 
A)  $72,000. 
B)  $68,000. 
C)  $28,000. 
D)  $40,000. 
E)  $36,000.

Question 5

Since it is recommended by the IASB, the direct method of preparing the statement of cash flows is most frequently used.

Accepted Answer

A) True 
 B)False

Question 6

The cash flow on total assets ratio is computed by dividing _____________ by __________.

Accepted Answer

Cash flows

Question 7

The accounting principle that requires important noncash financing and investing activities be reported on the statement of cash flows or in a footnote is the:

Accepted Answer

A)  Historical cost principle. 
B)  Materiality principle. 
C)  Full disclosure principle. 
D)  Going concern principle. 
E)  Business entity principle. 
A)  Historical cost principle. 
B)  Materiality principle. 
C)  Full disclosure principle. 
D)  Going concern principle. 
E)  Business entity principle.

Question 8

_____________ activities include the cash effects of transactions and events that determine net income.

Accepted Answer

The answer of _____________ activities include the cash effects of...

Question 9

A corporation reported average total assets in Year 1 of $397,350 and $440,800 in Year 2. Its net operating cash flow for Year 1 was $35,667 and $35,790 for Year 2. Calculate the cash flow on total assets ratio for both years. Comment on the results.

Accepted Answer

The answer of A corporation reported average total assets in...

Question 10

Cash paid for merchandise is an operating activity.

Accepted Answer

A) True 
 B)False

Question 11

A company reported net income of $318,000, operating cash flows of $218,000, total cash flows of $184,000, and average total assets of $898,000. Calculate its cash flow on total assets ratio.

Accepted Answer

$218,000/$

Question 12

Most managers stress the importance of understanding and predicting cash flows for business decisions.

Accepted Answer

A) True 
 B)False

Question 13

A cash coverage ratio of less than 1 indicates cash inadequacy to meet asset growth.

Accepted Answer

A) True 
 B)False

For each of the following separate cases, use the information provided to calculate the missing cash inflow or cash outflow using the direct method.

Investing activities include the:

Since it is recommended by the IASB, the direct method of preparing the statement of cash flows is most frequently used.

The cash flow on total assets ratio is computed by dividing ___ by .

The accounting principle that requires important noncash financing and investing activities be reported on the statement of cash flows or in a footnote is the:

_____________ activities include the cash effects of transactions and events that determine net income.

A corporation reported average total assets in Year 1 of $397,350 and $440,800 in Year 2. Its net operating cash flow for Year 1 was $35,667 and $35,790 for Year 2. Calculate the cash flow on total assets ratio for both years. Comment on the results.

Cash paid for merchandise is an operating activity.

A company reported net income of $318,000, operating cash flows of $218,000, total cash flows of $184,000, and average total assets of $898,000. Calculate its cash flow on total assets ratio.

Most managers stress the importance of understanding and predicting cash flows for business decisions.

A cash coverage ratio of less than 1 indicates cash inadequacy to meet asset growth.

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

Exam 16: Statement of Cash Flows

For each of the following separate cases, use the information provided to calculate the missing cash inflow or cash outflow using the direct method.

Investing activities include the:

Since it is recommended by the IASB, the direct method of preparing the statement of cash flows is most frequently used.

The cash flow on total assets ratio is computed by dividing _____________ by __________.

The accounting principle that requires important noncash financing and investing activities be reported on the statement of cash flows or in a footnote is the:

_____________ activities include the cash effects of transactions and events that determine net income.

A corporation reported average total assets in Year 1 of $397,350 and $440,800 in Year 2. Its net operating cash flow for Year 1 was $35,667 and $35,790 for Year 2. Calculate the cash flow on total assets ratio for both years. Comment on the results.

Cash paid for merchandise is an operating activity.

A company reported net income of $318,000, operating cash flows of $218,000, total cash flows of $184,000, and average total assets of $898,000. Calculate its cash flow on total assets ratio.

Most managers stress the importance of understanding and predicting cash flows for business decisions.

A cash coverage ratio of less than 1 indicates cash inadequacy to meet asset growth.

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 cash flow on total assets ratio is computed by dividing ___ by .