Question 1

When a company uses the indirect method to present the statement of cash flows,depreciation expense must be subtracted from net income to reconcile to net cash provided by operating activities.

Accepted Answer

A) True 
 B)False

Question 2

On the statement of cash flows,which of the following would be considered an investing activity?

Accepted Answer

A) A purchase of treasury stock 
B) A sale of land 
C) Depreciation of equipment 
D) A sale of inventory

Question 3

Use the direct method of cash flows to answer the following question:  
Compute the cash receivables received from customers during the year.

Accepted Answer

The answer of Use the direct method of cash flows...

Question 4

A company uses the indirect method to prepare the statement of cash flows.It presents the following data on its financial statements:

*Relates solely to the acquisition of inventory
What will appear in the operating activities section related to accounts payable?

Accepted Answer

A) The increase of $10,000 will be subtracted from net income. 
B) The increase of $10,000 will be added to net income. 
C) The increase of $10,000 will be subtracted from cost of goods sold. 
D) The increase of $10,000 will be added to cost of goods sold.

Question 5

Issuing preferred stock to stockholders would be a

Accepted Answer

A) cash inflow from investing. 
B) cash inflow from operations. 
C) cash inflow from depreciation. 
D) cash inflow from financing.

Question 6

All of the following are categories in the operating activities section using the direct method in the statement of cash flows except

Accepted Answer

A) changes in amortization 
B) changes in accounts receivable 
C) changes in inventory 
D) changes in accounts payable

Question 7

The following information is available for three companies.The information relates to the companies' plant assets.For each of the companies,determine the unknown amounts.

Accepted Answer

The answer of The following information is available for three...

Question 8

Operating activities resulting from the sales of goods and services relate to

Accepted Answer

A) retained earnings reported on the balance sheet. 
B) assets and liabilities reported on the balance sheet. 
C) the income statement. 
D) net income on the retained earnings statement.

Question 9

Which of the following items is one of the three sections on the statement of cash flows?

Accepted Answer

A) Retained earnings 
B) Total liabilities 
C) Total stockholder's equity 
D) Cash from investing activities

Question 10

A company uses the indirect method to prepare the statement of cash flows.Which of the following items would be subtracted from net income to determine the net cash flow from operating activities on the statement of cash flows?

Accepted Answer

A) An increase in dividends payable would be subtracted from net income to determine the net cash flow from operating activities in the statement of cash flows. 
B) A loss on the sale of equipment would be subtracted from net income to determine the net cash flow from operating activities in the statement of cash flows. 
C) A gain on the sale of equipment would be subtracted from net income to determine the net cash flow from operating activities in the statement of cash flows. 
D) Depreciation expense would be subtracted from net income to determine the net cash flow from operating activities in the statement of cash flows.

Question 11

A company uses the indirect method to prepare the statement of cash flows.How can amortization be presented on the statement of cash flows?

Accepted Answer

A) Amortization expense can be added to net income in the financing activities section on the statement of cash flows. 
B) Amortization expense can be subtracted from net income in the operating section on the statement of cash flows. 
C) Amortization expense can be added to net income in the operating activities section on the statement of cash flows. 
D) Amortization expense can be added to net income in the investing activities section on the statement of cash flows.

Question 12

On the statement of cash flows,which of the following section includes activities that increase and decrease long-term liabilities and owners' equity?

Accepted Answer

A) Operating section 
B) Financing section 
C) Investing section 
D) None of the above

Question 13

Use the indirect method of preparing a statement of cash flows to answer the question.
Ending balances for Sunday Hut are listed below:
  
Net income for this year was $97,000.
What was the net cash inflow from financing activities?

Accepted Answer

The answer of Use the indirect method of preparing a...

Question 14

The ________ section in a statement of cash flows using the direct method of cash flows is not the same compared to the indirect method of cash flows on the statement of cash flows.

Accepted Answer

A) operating activities 
B) financing activities 
C) investing activities 
D) none of the above

Question 15

Use the direct method of cash flows to answer the question.  
Calculate the cost of merchandise purchased during the year.

Accepted Answer

The answer of Use the direct method of cash flows...

Question 16

Buying and selling property,plant and equipment would be considered in

Accepted Answer

A) the investing portion of the statement of cash flows. 
B) the operating portion of the statement of cash flows. 
C) the financing portion of the statement of cash flows. 
D) none of the above portions of the statement of cash flows.

Question 17

The operating activities section of the statement of cash flows includes paying dividends and paying off loans.

Accepted Answer

A) True 
 B)False

Question 18

The beginning and ending balances of long-term debt are $64,000 and $35,200,respectively,and,cash payments for long-term debt during the year were $34,100.How much new long-term debt was issued during the year?

Accepted Answer

A) New long-term debt issued during the year was $1,100. 
B) New long-term debt issued during the year was $5,300. 
C) New long-term debt issued during the year was $28,800. 
D) New long-term debt issued during the year was $62,900.

Question 19

When a company uses the direct method to present the statement of cash flows,cash received from the sale of treasury stock increases the amount of net cash provided by investing activities.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following activities are included in the investing activities section of the statement of cash flows?

Accepted Answer

A) Activities that obtain the cash needed to launch and sustain the business 
B) Activities that increase or decrease long-term assets 
C) Activities that create revenue or expenses in the entity's major line of business 
D) None of the above

Exam 13: Statement of Cash Flows

When a company uses the indirect method to present the statement of cash flows,depreciation expense must be subtracted from net income to reconcile to net cash provided by operating activities.

On the statement of cash flows,which of the following would be considered an investing activity?

Use the direct method of cash flows to answer the following question: Compute the cash receivables received from customers during the year.

A company uses the indirect method to prepare the statement of cash flows.It presents the following data on its financial statements: *Relates solely to the acquisition of inventory What will appear in the operating activities section related to accounts payable?

Issuing preferred stock to stockholders would be a

All of the following are categories in the operating activities section using the direct method in the statement of cash flows except

The following information is available for three companies.The information relates to the companies' plant assets.For each of the companies,determine the unknown amounts.

Operating activities resulting from the sales of goods and services relate to

Which of the following items is one of the three sections on the statement of cash flows?

A company uses the indirect method to prepare the statement of cash flows.Which of the following items would be subtracted from net income to determine the net cash flow from operating activities on the statement of cash flows?

A company uses the indirect method to prepare the statement of cash flows.How can amortization be presented on the statement of cash flows?

On the statement of cash flows,which of the following section includes activities that increase and decrease long-term liabilities and owners' equity?

Use the indirect method of preparing a statement of cash flows to answer the question. Ending balances for Sunday Hut are listed below: Net income for this year was $97,000. What was the net cash inflow from financing activities?

The ________ section in a statement of cash flows using the direct method of cash flows is not the same compared to the indirect method of cash flows on the statement of cash flows.

Use the direct method of cash flows to answer the question. Calculate the cost of merchandise purchased during the year.

Buying and selling property,plant and equipment would be considered in

The operating activities section of the statement of cash flows includes paying dividends and paying off loans.

The beginning and ending balances of long-term debt are $64,000 and $35,200,respectively,and,cash payments for long-term debt during the year were $34,100.How much new long-term debt was issued during the year?

When a company uses the direct method to present the statement of cash flows,cash received from the sale of treasury stock increases the amount of net cash provided by investing activities.

Which of the following activities are included in the investing activities section of the statement of cash flows?