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

Investments that are readily convertible to a known amount of cash and are sufficiently close to their maturity so that the market value is unaffected by interest rate changes are ________.

Accepted Answer

The answer of Investments that are readily convertible to a...

Question 3

The statement of cash flows is:

Accepted Answer

A)  Another name for the statement of financial position. 
B)  A financial statement that presents information about changes in equity during a period. 
C)  A financial statement that reports the cash inflows and cash outflows for an accounting period, and that classifies those cash flows as operating activities, investing activities, or financing activities. 
D)  A financial statement that lists the types and amounts of assets, liabilities, and equity of a business on a specific date. 
E)  A financial statement that lists the types and amounts of the revenues and expenses of a business for an accounting period. 
A)  Another name for the statement of financial position. 
B)  A financial statement that presents information about changes in equity during a period. 
C)  A financial statement that reports the cash inflows and cash outflows for an accounting period, and that classifies those cash flows as operating activities, investing activities, or financing activities. 
D)  A financial statement that lists the types and amounts of assets, liabilities, and equity of a business on a specific date. 
E)  A financial statement that lists the types and amounts of the revenues and expenses of a business for an accounting period.

Question 4

Green Company reports depreciation expense of $35,000 for Year 2. Also, equipment costing $140,000 was sold for a $5,000 gain in Year 2. The following selected information is available for Green Company from its comparative balance sheet. Compute the cash received from the sale of the equipment.

Accepted Answer

A)  $23,000. 
B)  $35,000. 
C)  $38,000. 
D)  $40,000. 
E)  $67,000. 
A)  $23,000. 
B)  $35,000. 
C)  $38,000. 
D)  $40,000. 
E)  $67,000.

Question 5

Using the direct method, operating cash receipts includes cash received from customers.

Accepted Answer

A) True 
 B)False

Question 6

All of the following are examples of noncash financing and investing except:

Accepted Answer

A)  Retirement of debt by issuing equity stock. 
B)  Purchase of equipment by issuing a note payable. 
C)  Purchase of inventory using cash. 
D)  Purchase of a building by issuing equity stock. 
E)  Conversion of preferred stock to common stock. 
A)  Retirement of debt by issuing equity stock. 
B)  Purchase of equipment by issuing a note payable. 
C)  Purchase of inventory using cash. 
D)  Purchase of a building by issuing equity stock. 
E)  Conversion of preferred stock to common stock.

Question 7

The primary purpose of the statement of cash flows is to report all major cash receipts (inflows) and cash payments (outflows) during a period.

Accepted Answer

A) True 
 B)False

Question 8

Based on the information provided below for Krackle Corp., complete the following worksheet to be used to prepare the statement of cash flows using the indirect method.
(a) Net income for the year was $30,000.
(b) Dividends of $10,000 were declared and paid.
(c) Krackle's only noncash expense was depreciation which totaled $50,000.
(d) The company purchased plant assets for $70,000.
(e) Notes payable in the amount of $40,000 were issued during the year for cash.

Accepted Answer

The answer of Based on the information provided below for...

Question 9

When using the indirect method to calculate and report the net cash provided or used by operating activities, net income is adjusted for all but which of the following?

Accepted Answer

A)  Gains and losses from nonoperating items. 
B)  Revenues and expenses that did not provide or use cash. 
C)  Changes in noncurrent assets and noncurrent liabilities. 
D)  Changes in current liabilities related to operating activities. 
E)  Depreciation and amortization expense. 
A)  Gains and losses from nonoperating items. 
B)  Revenues and expenses that did not provide or use cash. 
C)  Changes in noncurrent assets and noncurrent liabilities. 
D)  Changes in current liabilities related to operating activities. 
E)  Depreciation and amortization expense.

Question 10

A purchase of land in exchange for a long-term note payable is reported in the investing section of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 11

Receipts of cash dividends and interest earned on loans are classified as investing activities.

Accepted Answer

A) True 
 B)False

Question 12

________ activities generally include those transactions and events that affect long-term assets.

Accepted Answer

The answer of ________ activities generally include those transactions and...

Question 13

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.

Accepted Answer

A)  $727,000. 
B)  $726,300. 
C)  $732,700. 
D)  $737,300. 
E)  $737,700. 
A)  $727,000. 
B)  $726,300. 
C)  $732,700. 
D)  $737,300. 
E)  $737,700.

Question 14

When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from operating activities generally are affected by:

Accepted Answer

A)  Net income, current assets, and current liabilities. 
B)  Noncurrent assets. 
C)  Noncurrent liability and equity accounts. 
D)  Both noncurrent assets and noncurrent liabilities. 
E)  Equity accounts only. 
A)  Net income, current assets, and current liabilities. 
B)  Noncurrent assets. 
C)  Noncurrent liability and equity accounts. 
D)  Both noncurrent assets and noncurrent liabilities. 
E)  Equity accounts only.

Question 15

When preparing the operating activities section of the statement of cash flows using the direct method, expenses and losses with no cash outflows are added back to net income.

Accepted Answer

A) True 
 B)False

Question 16

The following selected account balances are taken from a merchandising company's records:
   (a) Calculate the cash payments made during Year 2 for merchandise. Assume all of the company's accounts payable balances result from merchandise purchases.
(b) Calculate the cash receipts from customer sales during Year 2.
(c) Calculate the cash payments for salaries during Year 2.

Accepted Answer

(a) Decrease in inventory = 15,600-21,20

Question 17

When preparing the operating activities section of the statement of cash flows using the indirect method, non-operating gains are added to net income.

Accepted Answer

A) True 
 B)False

Question 18

If a company is using the indirect method to prepare the statement of cash flows, identify where an increase in the accounts receivable account should be reported:

Accepted Answer

A)  An increase in cash flows from operating activities 
B)  An increase in cash flows from investing activities 
C)  A decrease in cash flows from operating activities 
D)  A decrease in cash flows from investing activities 
E)  An increase in cash flows from financing activities 
A)  An increase in cash flows from operating activities 
B)  An increase in cash flows from investing activities 
C)  A decrease in cash flows from operating activities 
D)  A decrease in cash flows from investing activities 
E)  An increase in cash flows from financing activities

Question 19

The cash flow on total assets ratio is affected by income recognition and measurement.

Accepted Answer

A) True 
 B)False

Question 20

Information about cash flows influences decisions made by both internal and external users.

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.

Investments that are readily convertible to a known amount of cash and are sufficiently close to their maturity so that the market value is unaffected by interest rate changes are ________.

The statement of cash flows is:

Green Company reports depreciation expense of $35,000 for Year 2. Also, equipment costing $140,000 was sold for a $5,000 gain in Year 2. The following selected information is available for Green Company from its comparative balance sheet. Compute the cash received from the sale of the equipment.

Using the direct method, operating cash receipts includes cash received from customers.

All of the following are examples of noncash financing and investing except:

The primary purpose of the statement of cash flows is to report all major cash receipts (inflows) and cash payments (outflows) during a period.

When using the indirect method to calculate and report the net cash provided or used by operating activities, net income is adjusted for all but which of the following?

A purchase of land in exchange for a long-term note payable is reported in the investing section of the statement of cash flows.

Receipts of cash dividends and interest earned on loans are classified as investing activities.

________ activities generally include those transactions and events that affect long-term assets.

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.

When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from operating activities generally are affected by:

When preparing the operating activities section of the statement of cash flows using the direct method, expenses and losses with no cash outflows are added back to net income.

When preparing the operating activities section of the statement of cash flows using the indirect method, non-operating gains are added to net income.

If a company is using the indirect method to prepare the statement of cash flows, identify where an increase in the accounts receivable account should be reported:

The cash flow on total assets ratio is affected by income recognition and measurement.

Information about cash flows influences decisions made by both internal and external users.

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Analysis of Financial Statements

Time Value of Money

Lean Principles and Accounting

Accounting for Business Transactions

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Exam 12: Reporting 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.

Investments that are readily convertible to a known amount of cash and are sufficiently close to their maturity so that the market value is unaffected by interest rate changes are ________.

The statement of cash flows is:

Green Company reports depreciation expense of $35,000 for Year 2. Also, equipment costing $140,000 was sold for a $5,000 gain in Year 2. The following selected information is available for Green Company from its comparative balance sheet. Compute the cash received from the sale of the equipment.

Using the direct method, operating cash receipts includes cash received from customers.

All of the following are examples of noncash financing and investing except:

The primary purpose of the statement of cash flows is to report all major cash receipts (inflows) and cash payments (outflows) during a period.

When using the indirect method to calculate and report the net cash provided or used by operating activities, net income is adjusted for all but which of the following?

A purchase of land in exchange for a long-term note payable is reported in the investing section of the statement of cash flows.

Receipts of cash dividends and interest earned on loans are classified as investing activities.

________ activities generally include those transactions and events that affect long-term assets.

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.

When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from operating activities generally are affected by:

When preparing the operating activities section of the statement of cash flows using the direct method, expenses and losses with no cash outflows are added back to net income.

When preparing the operating activities section of the statement of cash flows using the indirect method, non-operating gains are added to net income.

If a company is using the indirect method to prepare the statement of cash flows, identify where an increase in the accounts receivable account should be reported:

The cash flow on total assets ratio is affected by income recognition and measurement.

Information about cash flows influences decisions made by both internal and external users.

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Analysis of Financial Statements

Time Value of Money

Lean Principles and Accounting

Accounting for Business Transactions

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