Question 1

Which one of the following is representative of typical cash flows from operating activities?

Accepted Answer

A) Receipts of cash dividends 
B) Repayment of cash loans 
C) Proceeds from the issuance of bonds and notes payable 
D) Payments to acquire equity securities of other companies 
E) Proceeds from collecting the principal amount of loans 
A) Receipts of cash dividends 
B) Repayment of cash loans 
C) Proceeds from the issuance of bonds and notes payable 
D) Payments to acquire equity securities of other companies 
E) Proceeds from collecting the principal amount of loans

Question 2

The three-step process in determining net cash inflows (outflows)from investing activities are: (1)identify changes in investing-related accounts; (2)explain these changes using reconstruction analysis; (3)report cash flow effects.

Accepted Answer

A) True 
 B)False

Question 3

On the statement of cash flows,business operations are classified as operating,investing,or financing activities.

Accepted Answer

A) True 
 B)False

Question 4

The first item reported in the operating activities section for a statement of cash flows prepared according to the indirect method is

Accepted Answer

A) Cash 
B) Cash received from customers 
C) Increase (decrease)in accounts receivable 
D) Profit 
E) Adjustments to profit 
A) Cash 
B) Cash received from customers 
C) Increase (decrease)in accounts receivable 
D) Profit 
E) Adjustments to profit

Question 5

Amy Corporation's income statement showed the following: profit,$72,000; depreciation expense,$8,000; and gain on sale of plant assets,$6,000.An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $5,700; merchandise inventory increased $8,000; prepaid expenses decreased $2,100; accounts payable increased $1,700.Calculate the net cash provided (or used)by operating activities.

Accepted Answer

A) $68,800 
B) $82,500 
C) $66,500 
D) $71,800 
E) $75,500 
A) $68,800 
B) $82,500 
C) $66,500 
D) $71,800 
E) $75,500

Question 6

Does an overall increase in the Cash balance represent a favourable situation for a company? Explain.

Accepted Answer

An increase in cash does not always resu

Question 7

In each of the following cases,use the information provided about the current year operations of Ivy Company to calculate the indicated cash flow item. $\begin{array}{|l|l|r|}
\hline \text { Case A: } & \text { Calculate cash received from dividends } & ? \
\hline & \text { Dividend revenue } & 14,900 \
\hline & \text { Dividends receivable January 1 } & 1,400 \
\hline & \text { Dividends receivable December 31 } & 1,700 \
\hline
\end{array}$

Accepted Answer

A) Case A = $14,600; Case B = $81,000 
B) Case A = $14,900; Case B = $78,900 
C) Case A = $15,300; Case B = $81,000 
D) Case A = $14,600; Case B = $78,900 
E) Case A = $14,900; Case B = $84,000 
A) Case A = $14,600; Case B = $81,000 
B) Case A = $14,900; Case B = $78,900 
C) Case A = $15,300; Case B = $81,000 
D) Case A = $14,600; Case B = $78,900 
E) Case A = $14,900; Case B = $84,000

Question 8

The direct method of preparing the statement of cash flows separately lists each major item of operating cash receipts and each major item of operating cash payments.

Accepted Answer

A) True 
 B)False

Question 9

The Merchandise Inventory for Year 1 was $100,000 and for Year 2 was $94,000.The Accounts Payable account for Year 1 was $40,000 and for Year 2 was $42,000.Cost of goods sold for Year 2 was $460,000.What was the total amount for cash payments for merchandise for Year 2?

Accepted Answer

A) $448,000 
B) $449,000 
C) $452,000 
D) $456,000 
E) $84,000 
A) $448,000 
B) $449,000 
C) $452,000 
D) $456,000 
E) $84,000

Question 10

Bad debts expense is an item that does not provide or use cash.

Accepted Answer

A) True 
 B)False

Question 11

The direct method is required by IFRS because it provides greater detail regarding operating cash flows.

Accepted Answer

A) True 
 B)False

Question 12

Changes in notes payable,non-current liabilities,and equity accounts are usually used in calculating and reporting

Accepted Answer

A) Cash flows from investing activities 
B) Cash flows from operating activities 
C) Cash flows from financing activities 
D) Non-cash financing activities 
E) Non-cash balance sheet accounts 
A) Cash flows from investing activities 
B) Cash flows from operating activities 
C) Cash flows from financing activities 
D) Non-cash financing activities 
E) Non-cash balance sheet accounts

Question 13

Noncash financing activities are disclosed in a note in the financing section of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 14

Cash flows from cash dividends and interest received are reported in the statement of cash flows as

Accepted Answer

A) Operating activities 
B) Financing activities 
C) Investing activities 
D) Noncash activities 
E) Not reported 
A) Operating activities 
B) Financing activities 
C) Investing activities 
D) Noncash activities 
E) Not reported

Question 15

Cash dividends and interest received can only be considered cash inflows from investing activities.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following items is reported in the body of the statement of cash flows?

Accepted Answer

A) Declaration of a cash dividend 
B) Payment of a cash dividend 
C) Declaration of a share dividend 
D) Distribution of a share dividend 
E) Share split 
A) Declaration of a cash dividend 
B) Payment of a cash dividend 
C) Declaration of a share dividend 
D) Distribution of a share dividend 
E) Share split

Question 17

Explain how the cash flows from operating activities section of the statement of cash flows is prepared using the indirect method.

Accepted Answer

Although not recommended by the IFRS,the

Question 18

Typical cash flows from investing activities include

Accepted Answer

A) Payments to purchase property,plant and equipment or other productive assets (excluding merchandise inventory) 
B) Proceeds from the sale (discounting)of loans made by the enterprise 
C) Proceeds from collecting the principal amount of loans 
D) Payments to acquire debt securities of other entities 
E) All of these 
A) Payments to purchase property,plant and equipment or other productive assets (excluding merchandise inventory) 
B) Proceeds from the sale (discounting)of loans made by the enterprise 
C) Proceeds from collecting the principal amount of loans 
D) Payments to acquire debt securities of other entities 
E) All of these

Question 19

The statement of cash flows explains the difference between the beginning and ending balances of cash and cash equivalents.

Accepted Answer

A) True 
 B)False

Question 20

The direct method calculates the net cash inflows (outflows)from operating activities by adjusting accrual profit to a cash basis.

Accepted Answer

A) True 
 B)False

Which one of the following is representative of typical cash flows from operating activities?

The three-step process in determining net cash inflows (outflows)from investing activities are: (1)identify changes in investing-related accounts; (2)explain these changes using reconstruction analysis; (3)report cash flow effects.

On the statement of cash flows,business operations are classified as operating,investing,or financing activities.

The first item reported in the operating activities section for a statement of cash flows prepared according to the indirect method is

Does an overall increase in the Cash balance represent a favourable situation for a company? Explain.

The direct method of preparing the statement of cash flows separately lists each major item of operating cash receipts and each major item of operating cash payments.

The Merchandise Inventory for Year 1 was $100,000 and for Year 2 was $94,000.The Accounts Payable account for Year 1 was $40,000 and for Year 2 was $42,000.Cost of goods sold for Year 2 was $460,000.What was the total amount for cash payments for merchandise for Year 2?

Bad debts expense is an item that does not provide or use cash.

The direct method is required by IFRS because it provides greater detail regarding operating cash flows.

Changes in notes payable,non-current liabilities,and equity accounts are usually used in calculating and reporting

Noncash financing activities are disclosed in a note in the financing section of the statement of cash flows.

Cash flows from cash dividends and interest received are reported in the statement of cash flows as

Cash dividends and interest received can only be considered cash inflows from investing activities.

Which of the following items is reported in the body of the statement of cash flows?

Explain how the cash flows from operating activities section of the statement of cash flows is prepared using the indirect method.

Typical cash flows from investing activities include

The statement of cash flows explains the difference between the beginning and ending balances of cash and cash equivalents.

The direct method calculates the net cash inflows (outflows)from operating activities by adjusting accrual profit to a cash basis.

Property, plant and Equipment Intangibles

Current Liabilities

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Income, earnings Per Share, and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Analyzing Financial Statements

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Exam 8: Reporting and Analyzing Cash Flows

Which one of the following is representative of typical cash flows from operating activities?

The three-step process in determining net cash inflows (outflows)from investing activities are: (1)identify changes in investing-related accounts; (2)explain these changes using reconstruction analysis; (3)report cash flow effects.

On the statement of cash flows,business operations are classified as operating,investing,or financing activities.

The first item reported in the operating activities section for a statement of cash flows prepared according to the indirect method is

Does an overall increase in the Cash balance represent a favourable situation for a company? Explain.

The direct method of preparing the statement of cash flows separately lists each major item of operating cash receipts and each major item of operating cash payments.

The Merchandise Inventory for Year 1 was $100,000 and for Year 2 was $94,000.The Accounts Payable account for Year 1 was $40,000 and for Year 2 was $42,000.Cost of goods sold for Year 2 was $460,000.What was the total amount for cash payments for merchandise for Year 2?

Bad debts expense is an item that does not provide or use cash.

The direct method is required by IFRS because it provides greater detail regarding operating cash flows.

Changes in notes payable,non-current liabilities,and equity accounts are usually used in calculating and reporting

Noncash financing activities are disclosed in a note in the financing section of the statement of cash flows.

Cash flows from cash dividends and interest received are reported in the statement of cash flows as

Cash dividends and interest received can only be considered cash inflows from investing activities.

Which of the following items is reported in the body of the statement of cash flows?

Explain how the cash flows from operating activities section of the statement of cash flows is prepared using the indirect method.

Typical cash flows from investing activities include

The statement of cash flows explains the difference between the beginning and ending balances of cash and cash equivalents.

The direct method calculates the net cash inflows (outflows)from operating activities by adjusting accrual profit to a cash basis.

Property, plant and Equipment Intangibles

Current Liabilities

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Income, earnings Per Share, and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Analyzing Financial Statements

Filters