Question 1

A major disadvantage of the indirect method of reporting cash flows from operating activities is that the difference between the net amount of cash flows from operating activities and net income is emphasized.

Accepted Answer

A) True 
 B)False

Question 2

If 800 shares of $40 par common stock are sold for $43,000,the $43,000 would be reported in the cash flows from financing activities section of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 3

Identify the section of the statement of cash flows (a-d)where each of the following items would be reported.
-Issuance of bond payable

Accepted Answer

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

Question 4

Which of the following increases cash?

Accepted Answer

A)  depreciation expense 
B)  acquisition of treasury stock 
C)  borrowing money by issuing a six-month note 
D)  the declaration of a cash dividend

Question 5

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 6

Indicate whether each of the following would be added to or deducted from net income in determining net cash flow from operating activities by the indirect method:

Accepted Answer

The answer of Indicate whether each of the following would...

Question 7

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 8

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,for...

Question 9

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

Accepted Answer

A)  a gain on the sale of land 
B)  a decrease in accounts payable 
C)  an increase in accrued liabilities 
D)  dividends paid on common stock

Question 10

Cash dividends of $50,000 were declared during the year.Cash dividends payable were $10,000 and $5,000 at the beginning and end of the year,respectively.The amount of cash for the payment of dividends during the year is

Accepted Answer

A)  $55,000 
B)  $50,000 
C)  $65,000 
D)  $60,000

Question 11

Free cash flow is the measure of operating cash flow available for corporate purposes after providing sufficient fixed asset additions to maintain current operations.

Accepted Answer

A) True 
 B)False

Question 12

Cash paid to purchase long-term investments would be reported in the statement of cash flows in

Accepted Answer

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

Question 13

On the statement of cash flows prepared by the indirect method,a $50,000 gain on the sale of investments would be

Accepted Answer

A)  deducted from net income in converting the net income reported on the income statement to cash flows from operating activities 
B)  added to 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 14

Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method?

Accepted Answer

A)  depreciation expense 
B)  gain on sale of land 
C)  a loss on the sale of equipment 
D)  dividends declared and paid

Question 15

The last item on the statement of cash flows prior to the schedule of noncash investing and financing activities reports

Accepted Answer

A)  the change in cash 
B)  cash at the end of the year 
C)  net cash flow from investing activities 
D)  net cash flow from financing activities

Question 16

The net income reported on the income statement for the current year was $58,000.Depreciation recorded on fixed assets for the year was $24,000.In addition,equipment with an original cost of $130,000 and accumulated depreciation of $115,000 on the date of the sale,was sold for $20,000.Balances of the current asset and current liability accounts at the end and beginning of the year are listed below.Prepare the cash flows from operating activities section of a statement of cash flows using the indirect method.

Accepted Answer

The answer of The net income reported on the income...

Question 17

Land costing $71,000 was sold for $50,000 cash.The loss on the sale was reported on the income statement as other expense.On the statement of cash flows,what amount should be reported as an investing activity from the sale of land?

Accepted Answer

A)  $50,000 
B)  $71,000 
C)  $121,000 
D)  $21,000

Question 18

Under GAAP,cash receipts from interest and dividends are classified as

Accepted Answer

A)  financing activities 
B)  operating activities 
C)  investing activities 
D)  either financing or investing activities

Question 19

​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 20

Free cash flow is flow cash from operations less cash used for

Accepted Answer

A)  investments in PP&E needed to maintain current operations 
B)  dividends and cash to redeem bonds payable 
C)  investments in PP&E needed to achieve desired future operations 
D)  fixed assets needed to maintain current operations and cash to redeem bonds payable

Exam 13: Statement of Cash Flows

A major disadvantage of the indirect method of reporting cash flows from operating activities is that the difference between the net amount of cash flows from operating activities and net income is emphasized.

If 800 shares of $40 par common stock are sold for $43,000,the $43,000 would be reported in the cash flows from financing activities section of the statement of cash flows.

Identify the section of the statement of cash flows (a-d) where each of the following items would be reported. -Issuance of bond payable

Which of the following increases cash?

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.

Indicate whether each of the following would be added to or deducted from net income in determining net cash flow from operating activities by the indirect method:

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

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

Cash dividends of $50,000 were declared during the year.Cash dividends payable were $10,000 and $5,000 at the beginning and end of the year,respectively.The amount of cash for the payment of dividends during the year is

Free cash flow is the measure of operating cash flow available for corporate purposes after providing sufficient fixed asset additions to maintain current operations.

Cash paid to purchase long-term investments would be reported in the statement of cash flows in

On the statement of cash flows prepared by the indirect method,a $50,000 gain on the sale of investments would be

Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method?

The last item on the statement of cash flows prior to the schedule of noncash investing and financing activities reports

Land costing $71,000 was sold for $50,000 cash.The loss on the sale was reported on the income statement as other expense.On the statement of cash flows,what amount should be reported as an investing activity from the sale of land?

Under GAAP,cash receipts from interest and dividends are classified as

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

Free cash flow is flow cash from operations less cash used for

Exam 13: Statement of Cash Flows

A major disadvantage of the indirect method of reporting cash flows from operating activities is that the difference between the net amount of cash flows from operating activities and net income is emphasized.

If 800 shares of $40 par common stock are sold for $43,000,the $43,000 would be reported in the cash flows from financing activities section of the statement of cash flows.

Identify the section of the statement of cash flows (a-d) where each of the following items would be reported. -Issuance of bond payable

Which of the following increases cash?

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.

Indicate whether each of the following would be added to or deducted from net income in determining net cash flow from operating activities by the indirect method:

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

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

Cash dividends of $50,000 were declared during the year.Cash dividends payable were $10,000 and $5,000 at the beginning and end of the year,respectively.The amount of cash for the payment of dividends during the year is

Free cash flow is the measure of operating cash flow available for corporate purposes after providing sufficient fixed asset additions to maintain current operations.

Cash paid to purchase long-term investments would be reported in the statement of cash flows in

On the statement of cash flows prepared by the indirect method,a $50,000 gain on the sale of investments would be

Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method?

The last item on the statement of cash flows prior to the schedule of noncash investing and financing activities reports

Land costing $71,000 was sold for $50,000 cash.The loss on the sale was reported on the income statement as other expense.On the statement of cash flows,what amount should be reported as an investing activity from the sale of land?

Under GAAP,cash receipts from interest and dividends are classified as

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

Free cash flow is flow cash from operations less cash used for

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