Question 1

The order of presentation of activities on the statement of cash flows is

Accepted Answer

A) operating, investing, and financing. 
B) operating, financing, and investing. 
C) financing, operating, and investing. 
D) financing, investing, and operating.

Question 2

Under the indirect method, retained earnings is adjusted for items that affected reported net income but did not affect cash.

Accepted Answer

A) True 
 B)False

Question 3

If a gain of $12,000 is incurred in selling (for cash) office equipment having a book value of $110,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

Accepted Answer

A) $98,000. 
B) $122,000. 
C) $110,000. 
D) $12,000.

Question 4

Vision Company purchased treasury stock with a cost of $16,000 during 2014. During the year, the company paid dividends of $20,000 and issued bonds payable for proceeds of $860,000. Cash flows from financing activities for 2014 total

Accepted Answer

A) $840,000 net cash inflow. 
B) $856,000 net cash inflow. 
C) $860,000 net cash outflow. 
D) $824,000 net cash inflow.

Question 5

A primary objective of the statement of cash flows is to show the income or loss on investing and financing transactions.

Accepted Answer

A) True 
 B)False

Question 6

Which one of the following affects cash during a period?

Accepted Answer

A) Recording depreciation expense 
B) Declaration of a cash dividend 
C) Write-off of an uncollectible account receivable 
D) Payment of an accounts payable

Question 7

The following data are available for Sampson Corporation.  Net cash provided by operating activities is:

Accepted Answer

A) $140,000. 
B) $260,000. 
C) $160,000. 
D) $240,000.

Question 8

On the statement of cash flows worksheet,

Accepted Answer

A) significant noncash investing and financing activities are not entered in the reconciling columns. 
B) a decrease in cash will be offset by a debit in the reconciling items columns at the bottom of the worksheet. 
C) an increase in cash will be offset by a debit in the reconciling items column at the bottom of the worksheet. 
D) income statement accounts are listed after balance sheet accounts in the top half of the worksheet under the indirect method.

Question 9

Ware Company had purchases of $260,000. The comparative balance sheet analysis revealed a $15,000 decrease in inventory and a $25,000 increase in accounts payable. What were Ware's cash payments to suppliers?

Accepted Answer

A) $235,000 
B) $220,000 
C) $275,000 
D) $300,000

Question 10

To determine the net cash provided (used) by operating activities, it is necessary to analyze

Accepted Answer

A) the current year's income statement. 
B) a comparative balance sheet. 
C) additional information. 
D) All of these answers are correct.

Question 11

Starting with net income and adjusting it for items that affected reported net income but which did not affect cash is called the

Accepted Answer

A) direct method. 
B) indirect method. 
C) working capital method. 
D) cost-benefit method.

Question 12

The information in a statement of cash flows helps investors and creditors assess the company's ability to pay dividends and meet obligations.

Accepted Answer

A) True 
 B)False

Question 13

Each of the following are particularly interested in the statement of cash flows except

Accepted Answer

A) creditors. 
B) employees. 
C) shareholders. 
D) government agencies.

Question 14

In Ramon Company, Treasury Stock increased $20,000 from a cash purchase, and Retained Earnings increased $80,000 as a result of net income of $120,000 and cash dividends paid of $40,000. Net cash used by financing activities is:

Accepted Answer

A) $20,000. 
B) $40,000. 
C) $120,000. 
D) $60,000.

Question 15

The statement of cash flows is a required statement that must be prepared along with an income statement, balance sheet, and retained earnings statement.

Accepted Answer

A) True 
 B)False

Question 16

In preparing a statement of cash flows, an increase in the Common Stock and Treasury Stock accounts during a period would be an investing activity.

Accepted Answer

A) True 
 B)False

Question 17

Each of the following would be reported under operating activities except cash receipts

Accepted Answer

A) from sales of goods. 
B) from sales of investments. 
C) of interest on loans. 
D) of dividends from investments.

Question 18

The statement of cash flows

Accepted Answer

A) is prepared instead of an income statement under generally accepted accounting principles. 
B) is used to assess an entity's ability to pay dividends and meet obligations. 
C) is prepared from comparative income statements. 
D) reflects earnings per share figures on a cash basis and on an accrual basis in the body of the statement.

Question 19

Adama Company reported a net loss of $6,000 for the year ended December 31, 2014. During the year, accounts receivable increased $15,000, merchandise inventory decreased $12,000, accounts payable decreased by $20,000, and depreciation expense of $12,000 was recorded. During 2014, operating activities

Accepted Answer

A) used net cash of $17,000. 
B) used net cash of $29,000. 
C) provided net cash of $24,000. 
D) provided net cash of $21,000.

Question 20

Cash provided by operations is generally equal to operating income.

Accepted Answer

A) True 
 B)False

Exam 13: Statement of Cash Flows

The order of presentation of activities on the statement of cash flows is

Under the indirect method, retained earnings is adjusted for items that affected reported net income but did not affect cash.

If a gain of $12,000 is incurred in selling (for cash) office equipment having a book value of $110,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

Vision Company purchased treasury stock with a cost of $16,000 during 2014. During the year, the company paid dividends of $20,000 and issued bonds payable for proceeds of $860,000. Cash flows from financing activities for 2014 total

A primary objective of the statement of cash flows is to show the income or loss on investing and financing transactions.

Which one of the following affects cash during a period?

The following data are available for Sampson Corporation. Net cash provided by operating activities is:

On the statement of cash flows worksheet,

Ware Company had purchases of $260,000. The comparative balance sheet analysis revealed a $15,000 decrease in inventory and a $25,000 increase in accounts payable. What were Ware's cash payments to suppliers?

To determine the net cash provided (used) by operating activities, it is necessary to analyze

Starting with net income and adjusting it for items that affected reported net income but which did not affect cash is called the

The information in a statement of cash flows helps investors and creditors assess the company's ability to pay dividends and meet obligations.

Each of the following are particularly interested in the statement of cash flows except

In Ramon Company, Treasury Stock increased $20,000 from a cash purchase, and Retained Earnings increased $80,000 as a result of net income of $120,000 and cash dividends paid of $40,000. Net cash used by financing activities is:

The statement of cash flows is a required statement that must be prepared along with an income statement, balance sheet, and retained earnings statement.

In preparing a statement of cash flows, an increase in the Common Stock and Treasury Stock accounts during a period would be an investing activity.

Each of the following would be reported under operating activities except cash receipts

The statement of cash flows

Cash provided by operations is generally equal to operating income.