Question 1

Atom Corporation paid cash dividends totaling $75,000 during its most recent fiscal year.How should this information be reported on Atom's statement of cash flows?

Accepted Answer

A) In operating activities as a source of funds. 
B) In investing activities as a source of funds. 
C) In investing activities as a use of funds. 
D) In financing activities as a source of funds. 
E) In financing activities as a use of funds.

Question 2

Financing activities include (a)the purchase and sale of long-term assets,(b)the purchase and sale of short-term investments,and (c)lending and collecting on loans.

Accepted Answer

A) True 
 B)False

Question 3

Transactions that include purchasing and selling plant assets and investments in debt and equity securities.

Accepted Answer

A) Financing activities 
B) Investing activities 
C) Statement of cash flows 
D) Indirect method 
E) Direct method
F)Operating activities

Question 4

________ activities include the cash effects of transactions and events that determine net income.

Accepted Answer

The answer of ________ activities include the cash effects of...

Question 5

Equipment costing $100,000 with accumulated depreciation of $40,000 is sold at a loss of $10,000.This implies that $40,000 cash was received from the sale.

Accepted Answer

A) True 
 B)False

Question 6

The gain or loss from retirement of notes payable is reported under cash flows from operating activities on the statement of cash flows using the indirect method.

Accepted Answer

A) True 
 B)False

Question 7

Financing activities include receiving cash from issuing debt and receiving cash dividends from investments in other companies' stocks.

Accepted Answer

A) True 
 B)False

Question 8

When analyzing the changes on a spreadsheet used to prepare a statement of cash flows,the cash flows from investing 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.

Question 9

Cash paid for merchandise is an operating activity.

Accepted Answer

A) True 
 B)False

Question 10

When using a spreadsheet to prepare the statement of cash flows,a decrease in accounts payable is entered in the Analysis of Changes columns with a debit in the statement of cash flows section and a credit in the balance sheet section.

Accepted Answer

A) True 
 B)False

Question 11

A company reported that its bonds with a par value of $50,000 and a carrying value of $57,000 are retired for $60,000 cash,resulting in a loss of $3,000.The amount to be reported under cash flows from financing activities is:

Accepted Answer

A) $(3,000). 
B) $(60,000). 
C) $(57,000). 
D) $7,000. 
E) $(7,000).

Question 12

The cash flow on total assets ratio is calculated by:

Accepted Answer

A) Dividing cash flows from operations by average total assets. 
B) Dividing total cash flows by average total assets. 
C) Dividing average total assets by cash flows from financing activities. 
D) Dividing average total assets by total cash flows. 
E) Total cash flows divided by average total assets times 365.

Question 13

Equipment costing $200,000 with accumulated depreciation of $160,000 is sold at a loss of $10,000.This implies that $30,000 cash was received from the sale.

Accepted Answer

A) True 
 B)False

Question 14

Mayweather reports net income of $305,000 for the year ended December 31.It also reports $93,700 depreciation expense and a $10,000 loss on the sale of equipment.Its comparative balance sheet reveals a $40,200 increase in accounts receivable,a $10,200 decrease in prepaid expenses,a $15,200 increase in accounts payable,a $12,500 decrease in wages payable,a $75,000 increase in equipment,and a $100,000 decrease in notes payable.Calculate the net increase in cash for the year.

Accepted Answer

A) $216,400. 
B) $281,400. 
C) $381,400. 
D) $206,400. 
E) $406,400.

Question 15

A company's transactions with its creditors to borrow money and/or to repay the principal amounts of both short- and long-term debt are reported as cash flows from:

Accepted Answer

A) Operating activities. 
B) Investing activities. 
C) Financing activities. 
D) Direct activities. 
E) Indirect activities.

Question 16

Use the information provided below to calculate the cash paid for interest for the period.

Accepted Answer

The answer of Use the information provided below to calculate...

Question 17

When preparing the operating activities section of the statement of cash flows using the indirect method,a decrease in accounts receivable is subtracted from net income.

Accepted Answer

A) True 
 B)False

Question 18

The appropriate section in the statement of cash flows for reporting the issuance of common stock for cash is:

Accepted Answer

A) Operating activities. 
B) Financing activities. 
C) Investing activities. 
D) Schedule of noncash investing or financing activity. 
E) This is not reported on the statement of cash flows.

Question 19

To effectively evaluate cash flows,we separately analyze investing,financing,and operating activities.

Accepted Answer

A) True 
 B)False

Question 20

Use the following calendar-year information to prepare Adam Company's statement of cash flows using the direct method.

Accepted Answer

The answer of Use the following calendar-year information to prepare...

Exam 12: Reporting Cash Flows

Atom Corporation paid cash dividends totaling $75,000 during its most recent fiscal year.How should this information be reported on Atom's statement of cash flows?

Financing activities include (a)the purchase and sale of long-term assets,(b)the purchase and sale of short-term investments,and (c)lending and collecting on loans.

Transactions that include purchasing and selling plant assets and investments in debt and equity securities.

________ activities include the cash effects of transactions and events that determine net income.

Equipment costing $100,000 with accumulated depreciation of $40,000 is sold at a loss of $10,000.This implies that $40,000 cash was received from the sale.

The gain or loss from retirement of notes payable is reported under cash flows from operating activities on the statement of cash flows using the indirect method.

Financing activities include receiving cash from issuing debt and receiving cash dividends from investments in other companies' stocks.

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

Cash paid for merchandise is an operating activity.

When using a spreadsheet to prepare the statement of cash flows,a decrease in accounts payable is entered in the Analysis of Changes columns with a debit in the statement of cash flows section and a credit in the balance sheet section.

A company reported that its bonds with a par value of $50,000 and a carrying value of $57,000 are retired for $60,000 cash,resulting in a loss of $3,000.The amount to be reported under cash flows from financing activities is:

The cash flow on total assets ratio is calculated by:

Equipment costing $200,000 with accumulated depreciation of $160,000 is sold at a loss of $10,000.This implies that $30,000 cash was received from the sale.

A company's transactions with its creditors to borrow money and/or to repay the principal amounts of both short- and long-term debt are reported as cash flows from:

Use the information provided below to calculate the cash paid for interest for the period.

When preparing the operating activities section of the statement of cash flows using the indirect method,a decrease in accounts receivable is subtracted from net income.

The appropriate section in the statement of cash flows for reporting the issuance of common stock for cash is:

To effectively evaluate cash flows,we separately analyze investing,financing,and operating activities.

Use the following calendar-year information to prepare Adam Company's statement of cash flows using the direct method.