Question 1

For each of the following, identify whether it would be disclosed as an operating (O), financing (F), or investing (I) activity on the statement of cash flows under the indirect method.

Accepted Answer

The answer of For each of the following, identify whether...

Question 2

Repayments of bonds would be shown as a cash outflow in the investing section of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 3

If accounts payable have increased during a period,

Accepted Answer

A) revenues on an accrual basis are less than revenues on a cash basis 
B) expenses on an accrual basis are less than expenses on a cash basis 
C) expenses on an accrual basis are the same as expenses on a cash basis 
D) expenses on an accrual basis are greater than expenses on a cash basis

Question 4

Cash paid for preferred stock dividends should be shown on the statement of cash flows under

Accepted Answer

A) investing activities 
B) financing activities 
C) noncash investing and financing activities 
D) operating activities

Question 5

To arrive at cash flows from operations, it is necessary to convert the income statement from an accrual basis to the cash basis of accounting.

Accepted Answer

A) True 
 B)False

Question 6

The following selected account balances appeared on the financial statements of the Washington Company. Use these balances to answer the questions that follow.  The Washington Company uses the direct method to calculate net cash flow from operating activities. Assume that all accounts payable are owed to merchandise suppliers.​
-Income tax expense was $175,000 for the year. Income tax payable was $30,000 and $40,000 at the beginning and end of the year, respectively. Cash payments for income tax reported on the statement of cash flows using the direct method is

Accepted Answer

A) $175,000 
B) $165,000 
C) $205,000 
D) $215,000

Question 7

Cash flows from financing activities, as part of the statement of cash flows, would include any payments for dividends.

Accepted Answer

A) True 
 B)False

Question 8

On the statement of cash flows, the cash flows from financing activities section would include

Accepted Answer

A) receipts from the sale of investments 
B) payments for the acquisition of investments 
C) receipts from a note receivable 
D) receipts from the issuance of common stock

Question 9

On the basis of the following data for Garrett Co. for Years 1 and 2 ended December 31, prepare a statement of cash flows using the indirect method of reporting cash flows from operating activities. Assume that equipment costing $125,000 was purchased for cash and equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000; that the stock was issued for cash; and that the only entries in the retained earnings account were for net income of $56,000 and cash dividends declared of $18,000.

Accepted Answer

The answer of On the basis of the following data...

Question 10

Cash paid to acquire treasury stock should be shown on the statement of cash flows under investing activities.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following represents an inflow of cash and therefore would be reported on the statement of cash flows?

Accepted Answer

A) retirement of bond payable 
B) acquisition of treasury stock 
C) declaration of stock dividends 
D) issuance of long-term debt

Question 12

Sales reported on the income statement were $372,000. The accounts receivable balance declined $4,500 over the year. The amount of cash received from customers was $367,500.

Accepted Answer

A) True 
 B)False

Question 13

To determine cash payments for merchandise for the statement of cash flows using the direct method, a decrease in accounts payable is added to the cost of goods sold. Assume all accounts payable are owed to merchandise suppliers.

Accepted Answer

A) True 
 B)False

Question 14

The comparative balance sheet of ConnieJo Company, for December 31, Years 1 and 2 ended December 31 appears below in condensed form:  The income statement for the current year is as follows:  Additional data for the current year are as follows:  Prepare a statement of cash flows, using the direct method of reporting cash flows from operating activities.​

Accepted Answer

The answer of The comparative balance sheet of ConnieJo Company,...

Question 15

Changes in current assets and current liabilities are reported on the statement of cash flows, indirect method, in the

Accepted Answer

A) operating activities 
B) financing activities 
C) investing activities 
D) separate schedule of noncash activities

Question 16

A building with a cost of $153,000 and accumulated depreciation of $42,000 was sold for an $11,000 gain. When using the indirect method, the cash generated from this investing activity was $121,000.

Accepted Answer

A) True 
 B)False

Question 17

In determining the cash flows from operating activities for the statement of cash flows by the indirect method, the depreciation expense for the period is added to the net income for the period.

Accepted Answer

A) True 
 B)False

Question 18

Accounts receivable from sales transactions were $51,000 at the beginning of the year and $64,000 at the end of the year. Net income reported on the income statement for the year was $105,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows prepared by the indirect method is

Accepted Answer

A) $105,000 
B) $118,000 
C) $92,000 
D) $169,000

Question 19

On the statement of cash flows, a $7,500 gain on the sale of fixed assets would be

Accepted Answer

A) added to net income in converting the net income reported on the income statement to cash flows from operating activities 
B) deducted from net income in converting the net income reported on the income statement to cash flows from operating activities 
C) added to dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends 
D) deducted from dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends

Question 20

The income statement disclosed the following items for the current year:  Balances of the current assets and current liabilities accounts changed between December 31, last year, and December 31, this year, as follows:  Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method.

Accepted Answer

The answer of The income statement disclosed the following items...

Exam 13: Statement of Cash Flows

For each of the following, identify whether it would be disclosed as an operating (O), financing (F), or investing (I) activity on the statement of cash flows under the indirect method.

Repayments of bonds would be shown as a cash outflow in the investing section of the statement of cash flows.

If accounts payable have increased during a period,

Cash paid for preferred stock dividends should be shown on the statement of cash flows under

To arrive at cash flows from operations, it is necessary to convert the income statement from an accrual basis to the cash basis of accounting.

Cash flows from financing activities, as part of the statement of cash flows, would include any payments for dividends.

On the statement of cash flows, the cash flows from financing activities section would include

Cash paid to acquire treasury stock should be shown on the statement of cash flows under investing activities.

Which of the following represents an inflow of cash and therefore would be reported on the statement of cash flows?

Sales reported on the income statement were $372,000. The accounts receivable balance declined $4,500 over the year. The amount of cash received from customers was $367,500.

To determine cash payments for merchandise for the statement of cash flows using the direct method, a decrease in accounts payable is added to the cost of goods sold. Assume all accounts payable are owed to merchandise suppliers.

Changes in current assets and current liabilities are reported on the statement of cash flows, indirect method, in the

A building with a cost of $153,000 and accumulated depreciation of $42,000 was sold for an $11,000 gain. When using the indirect method, the cash generated from this investing activity was $121,000.

In determining the cash flows from operating activities for the statement of cash flows by the indirect method, the depreciation expense for the period is added to the net income for the period.

On the statement of cash flows, a $7,500 gain on the sale of fixed assets would be