Question 1

The following information was taken from the financial records of Mr. Transmission:  How would the change in accounts payable be reported in the operating activities section of the statement of cash flows under the indirect method?

Accepted Answer

A) As an addition to operating expenses. 
B) As a deduction from operating expenses. 
C) As an addition to net income. 
D) As a deduction from net income.

Question 2

Mary Kay Cosmetics
Selected data and additional information from the company's records are presented below:  Additional information:
-Refer to Mary Kay Cosmetics. What amount was paid to retire bonds payable during 2020?

Accepted Answer

The answer of Mary Kay Cosmetics
Selected data and additional information...

Question 3

Cash ________________ are items readily convertible into a known amount of cash which have an original maturity to the investor of 3 months or less.

Accepted Answer

The answer of Cash ________________ are items readily convertible into...

Question 4

Significant noncash transactions are not reported on the statement of cash flows, but in a separate schedule shown either at the bottom of the statement of cash flows or in a note to the financial statements.

Accepted Answer

A) True 
 B)False

Question 5

If the beginning balance in Accounts Receivable is $11,000 and the ending balance is $9,000, then credit sales must have exceeded collections on account.

Accepted Answer

A) True 
 B)False

Question 6

The indirect method of preparing a statement of cash flows begins with net income and then adjusts it for noncash items to produce net cash flow from ____________________.

Accepted Answer

The answer of The indirect method of preparing a statement...

Question 7

When using the indirect method to determine operating cash flows, how would the retirement of bonds payable at their maturity date be shown on the Statement of Cash Flows?

Accepted Answer

A) operating activity 
B) investing activity 
C) financing activity 
D) noncash investing and financing activity 
E) not reported on the statement of cash flows

Question 8

The collection of accounts receivable results in a cash ____________________ reported in the operating activities section of the statement of cash flows using the indirect method.

Accepted Answer

The answer of The collection of accounts receivable results in...

Question 9

Match these terms with their correct definition.
-Include cash received from the issuance of stock and cash used to pay dividends.

Accepted Answer

A) Cash flow adequacy ratio 
B) Cash flows from financing activities 
C) Cash flows from investing activities 
D) Cash flow from operating activities 
E) Direct method
F)Free cash flow
G)Income statement
H)Indirect method
I)Noncash investing & financing activities
J)Statement of cash flows

Question 10

The statement of cash flows

Accepted Answer

A) along with the balance sheet and income statement is prepared on the accrual basis. 
B) along with the balance sheet and statement of retained earnings is dated as of a specific year end date. 
C) along with the balance sheet is used to analyze liquidity. 
D) ties the balance sheet to the statement of retained earnings.

Question 11

A company reported net income of $950,000. Cash from operations

Accepted Answer

A) will always be more than $950,000. 
B) will always be less than $950,000. 
C) will be equal to $950,000. 
D) cannot be determined without more information.

Question 12

Use the following codes to indicate how the cash flow effect, if any, of each transaction would be reported on a statement of cash flows if the operating activities section is prepared using the direct method. (Choices may be used more than once.)
-Paid the cash dividends.

Accepted Answer

A) Inflow from operating activity 
B) Outflow from operating activity 
C) Inflow from investing activity 
D) Outflow from investing activity 
E) Inflow from financing activity
F)Outflow from financing activity
G)Noncash investing and financing activity
H)Not reported on statement of cash flows

Question 13

Occasionally, companies engage in important investing and financing activities which do not affect cash. If the amount of the transaction is significant, how should it be disclosed when financial statements are prepared?

Accepted Answer

A) In a separate section in the cash flow statement with a corresponding zero balance. 
B) In investing activities. 
C) In a note to the financial statements or in a supplemental schedule. 
D) In both investing and financing activities.

Question 14

When using the direct method to determine operating cash flows, how is the purchase of equipment for cash shown on the Statement of Cash Flows?

Accepted Answer

A) operating activity 
B) investing activity 
C) financing activity 
D) noncash investing and financing activity 
E) not reported on the statement of cash flows

Question 15

Use the following codes to indicate how the cash flow effect, if any, of each transaction would be reported on a statement of cash flows if the operating activities section is prepared using the direct method. (Choices may be used more than once.)
-Repaid a long-term bonds payable.

Accepted Answer

A) Inflow from operating activity 
B) Outflow from operating activity 
C) Inflow from investing activity 
D) Outflow from investing activity 
E) Inflow from financing activity
F)Outflow from financing activity
G)Noncash investing and financing activity
H)Not reported on statement of cash flows

Question 16

Mary Kay Cosmetics
Selected data and additional information from the company's records are presented below:  Additional information:
-Refer to Mary Kay Cosmetics. How would the transaction to acquire a building by signing a 20-year mortgage note payable be reported on the statement of cash flows for 2020?

Accepted Answer

The answer of Mary Kay Cosmetics
Selected data and additional information...

Question 17

The financial statement that summarizes the operating, investing, and financing activities of a business over a period of time is the ____________________.

Accepted Answer

The answer of The financial statement that summarizes the operating,...

Question 18

Selected data from the financial statements of Mars & Venus Counseling Center for the years ended December 31, 2020 and 2019, are presented below:  What is the amount of cash and cash equivalents at the end of 2020?

Accepted Answer

The answer of Selected data from the financial statements of...

Question 19

A company reported the following information:  How much cash was paid for interest during 2020?

Accepted Answer

A) $15,000 
B) $29,000 
C) $30,200 
D) $25,200

Question 20

The following items were reported by Morris Plumbing Company:  What amount would be reported in the operating activities section of the statement of cash flows for Collections from Customers under the direct method, assuming that all sales are on credit?

Accepted Answer

A) $975,000 
B) $1,025,000 
C) $1,225,000 
D) $1,250,000

Exam 11: The Statement Of Cash Flows

The following information was taken from the financial records of Mr. Transmission: How would the change in accounts payable be reported in the operating activities section of the statement of cash flows under the indirect method?

Mary Kay Cosmetics Selected data and additional information from the company's records are presented below: Additional information: -Refer to Mary Kay Cosmetics. What amount was paid to retire bonds payable during 2020?

Cash ________________ are items readily convertible into a known amount of cash which have an original maturity to the investor of 3 months or less.

Significant noncash transactions are not reported on the statement of cash flows, but in a separate schedule shown either at the bottom of the statement of cash flows or in a note to the financial statements.

If the beginning balance in Accounts Receivable is $11,000 and the ending balance is $9,000, then credit sales must have exceeded collections on account.

The indirect method of preparing a statement of cash flows begins with net income and then adjusts it for noncash items to produce net cash flow from ____________________.

When using the indirect method to determine operating cash flows, how would the retirement of bonds payable at their maturity date be shown on the Statement of Cash Flows?

The collection of accounts receivable results in a cash ____________________ reported in the operating activities section of the statement of cash flows using the indirect method.

Match these terms with their correct definition. -Include cash received from the issuance of stock and cash used to pay dividends.

The statement of cash flows

A company reported net income of $950,000. Cash from operations

Use the following codes to indicate how the cash flow effect, if any, of each transaction would be reported on a statement of cash flows if the operating activities section is prepared using the direct method. (Choices may be used more than once.) -Paid the cash dividends.

Occasionally, companies engage in important investing and financing activities which do not affect cash. If the amount of the transaction is significant, how should it be disclosed when financial statements are prepared?

When using the direct method to determine operating cash flows, how is the purchase of equipment for cash shown on the Statement of Cash Flows?

Use the following codes to indicate how the cash flow effect, if any, of each transaction would be reported on a statement of cash flows if the operating activities section is prepared using the direct method. (Choices may be used more than once.) -Repaid a long-term bonds payable.

The financial statement that summarizes the operating, investing, and financing activities of a business over a period of time is the ____________________.

Selected data from the financial statements of Mars & Venus Counseling Center for the years ended December 31, 2020 and 2019, are presented below: What is the amount of cash and cash equivalents at the end of 2020?

A company reported the following information: How much cash was paid for interest during 2020?

The following items were reported by Morris Plumbing Company: What amount would be reported in the operating activities section of the statement of cash flows for Collections from Customers under the direct method, assuming that all sales are on credit?