Question 1

Rarely will the cash flows from operating activities,as reported on the statement of cash flows,be the same as the net income reported on the income statement.

Accepted Answer

A) True 
 B)False

Question 2

Free cash flow is

Accepted Answer

A)  all cash in the bank 
B)  cash from operations 
C)  cash from financing less cash used to purchase fixed assets to maintain productive capacity and cash used for dividends 
D)  cash flow from operations less cash used to purchase fixed assets to maintain productive capacity

Question 3

Purchasing equipment by issuing a six-month note should be shown on the statement of cash flows under the investing activities section.

Accepted Answer

A) True 
 B)False

Question 4

Sales for the year were $600,000.Accounts receivable were $100,000 and $80,000 at the beginning and end of the year,respectively.Cash received from customers to be reported on the statement of cash flows using the direct method is

Accepted Answer

A)  $700,000 
B)  $600,000 
C)  $580,000 
D)  $620,000

Question 5

Accounts receivable resulting from sales to customers amounted to $40,000 and $31,000 at the beginning and end of the year,respectively.Income reported on the income statement for the year was $120,000.Exclusive of the effect of other adjustments,the net cash flows from operating activities to be reported on the statement of cash flows using the indirect method is

Accepted Answer

A)  $120,000 
B)  $129,000 
C)  $151,000 
D)  $111,000

Question 6

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 7

​When using the Spreadsheet (work sheet)method to analyze noncash accounts,it is best to start with

Accepted Answer

A)  ​cash 
B)  ​net income 
C)  ​retained earnings 
D)  ​revenue

Question 8

Complete each of the columns on the table below,indicating in which section each item would be reported on the statement of cash flows (operating,investing,or financing),the amount that would be reported,and whether the item would create an increase or decrease in cash.For item that affect more than one section of the statement,indicate all affected.Assume the indirect method of reporting cash flows from operating activities.
The first item has been completed as an example.

Accepted Answer

The answer of Complete each of the columns on the...

Question 9

Baxter Company reported a net loss of $13,000 for the year ended December 31.During the year,accounts receivable decreased by $5,000,inventory increased by $8,000,accounts payable increased by $10,000,and depreciation expense of $4,000 was recorded.During the year,operating activities

Accepted Answer

A)  provided net cash of $8,000 
B)  provided net cash of $2,000 
C)  used net cash of $8,000 
D)  used net cash of $2,000

Question 10

The statement of cash flows is not one of the basic financial statements.

Accepted Answer

A) True 
 B)False

Question 11

Identify the section of the statement of cash flows (a-d)where each of the following items would be reported.
-Sale of machinery held for use by the company

Accepted Answer

A) Operating activities 
B) Financing activities 
C) Investing activities 
D) Schedule of noncash financing and investing

Question 12

Dorman Company reported the following data:
​
​
  Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method.

Accepted Answer

The answer of Dorman Company reported the following data:
​
​
 ...

Question 13

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 14

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 15

Under the indirect method,expenses that do not affect cash are added to net income in the operating activities section of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 16

Cash receipts received from the issuance of a mortgage notes payable would be classified as a(n)

Accepted Answer

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

Question 17

Cash outflows from financing activities include the payment of cash dividends,the acquisition of treasury stock,and the repayment of amounts borrowed.

Accepted Answer

A) True 
 B)False

Question 18

The following information is available from the current period financial statements: ​
 The net cash flow from operating activities using the indirect method is

Accepted Answer

A)  $166,000 
B)  $184,000 
C)  $110,000 
D)  $240,000

Question 19

Cash dividends paid on capital stock would be reported in the statement of cash flows in

Accepted Answer

A)  the cash flows from financing activities section 
B)  the cash flows from investing activities section 
C)  a separate schedule 
D)  the cash flows from operating activities section

Question 20

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

Exam 13: Statement of Cash Flows

Rarely will the cash flows from operating activities,as reported on the statement of cash flows,be the same as the net income reported on the income statement.

Free cash flow is

Purchasing equipment by issuing a six-month note should be shown on the statement of cash flows under the investing activities section.

Sales for the year were $600,000.Accounts receivable were $100,000 and $80,000 at the beginning and end of the year,respectively.Cash received from customers to be reported on the statement of cash flows using the direct method is

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.

When using the Spreadsheet (work sheet) method to analyze noncash accounts,it is best to start with

Baxter Company reported a net loss of $13,000 for the year ended December 31.During the year,accounts receivable decreased by $5,000,inventory increased by $8,000,accounts payable increased by $10,000,and depreciation expense of $4,000 was recorded.During the year,operating activities

The statement of cash flows is not one of the basic financial statements.

Identify the section of the statement of cash flows (a-d) where each of the following items would be reported. -Sale of machinery held for use by the company

Dorman Company reported the following data: Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method.

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.

Under the indirect method,expenses that do not affect cash are added to net income in the operating activities section of the statement of cash flows.

Cash receipts received from the issuance of a mortgage notes payable would be classified as a(n)

Cash outflows from financing activities include the payment of cash dividends,the acquisition of treasury stock,and the repayment of amounts borrowed.

The following information is available from the current period financial statements: The net cash flow from operating activities using the indirect method is

Cash dividends paid on capital stock would be reported in the statement of cash flows in

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.

Exam 13: Statement of Cash Flows

Rarely will the cash flows from operating activities,as reported on the statement of cash flows,be the same as the net income reported on the income statement.

Free cash flow is

Purchasing equipment by issuing a six-month note should be shown on the statement of cash flows under the investing activities section.

Sales for the year were $600,000.Accounts receivable were $100,000 and $80,000 at the beginning and end of the year,respectively.Cash received from customers to be reported on the statement of cash flows using the direct method is

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.

​When using the Spreadsheet (work sheet) method to analyze noncash accounts,it is best to start with

Baxter Company reported a net loss of $13,000 for the year ended December 31.During the year,accounts receivable decreased by $5,000,inventory increased by $8,000,accounts payable increased by $10,000,and depreciation expense of $4,000 was recorded.During the year,operating activities

The statement of cash flows is not one of the basic financial statements.

Identify the section of the statement of cash flows (a-d) where each of the following items would be reported. -Sale of machinery held for use by the company

Dorman Company reported the following data: ​ ​ Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method.

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.

Under the indirect method,expenses that do not affect cash are added to net income in the operating activities section of the statement of cash flows.

Cash receipts received from the issuance of a mortgage notes payable would be classified as a(n)

Cash outflows from financing activities include the payment of cash dividends,the acquisition of treasury stock,and the repayment of amounts borrowed.

The following information is available from the current period financial statements: ​ The net cash flow from operating activities using the indirect method is

Cash dividends paid on capital stock would be reported in the statement of cash flows in

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.

When using the Spreadsheet (work sheet) method to analyze noncash accounts,it is best to start with

Dorman Company reported the following data: Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method.

The following information is available from the current period financial statements: The net cash flow from operating activities using the indirect method is