Exam 12: Reporting and Interpreting the Statement of Cash Flows

In general, the cash flow from operating activities is considered by many to be the most important component of the Statement of Cash Flows.

Given this information, what is the amount of cash paid for wages?

Given this information, what is the amount of cash paid for inventory?

A gain or loss from selling equipment is reported under cash flows from operating activities using the direct method.

Two years ago, your company bought $40,000 in bonds from another company. This month, it sold half of those bonds for $20,640 and lent $1,000 to an employee with a promissory note. On the statement of cash flows for this accounting period, your company would report a net cash:

When the direct method is used to determine the net cash flows from operating activities, which of the following adjustments must be made to income tax expense to determine total income tax payments?

If Cost of goods sold is $145,000 and the beginning and ending Inventory balances are $18,000 and $13,000, respectively, the net purchases of inventory are:

Given this information, what is the amount of cash collected from customers?

If the cash balance at the beginning of the current year was $0, what is the amount of cash at the end of the year?

The repayment of the principal of a loan which had been used to finance the purchase of equipment should be reported on the statement of cash flows as a

Assume a company uses the indirect method to prepare its statement of cash flows. If the supplies account decreases and accounts payable increases during an accounting period, what does the company do with the changes in these accounts to calculate net cash flows from operating activities?

Which of the following items would be reported on a statement of cash flows using the indirect method, but not on a statement prepared using the direct method?

Which of the following statements regarding quality of income ratio is NOT true?

Buffers, Inc., uses cash when buying and selling all of its investment assets. Which of the following statements regarding cash flows are true? (1). When the investment asset accounts increase, net cash inflows have occurred. (2). When the investment asset accounts increase, net cash outflows have occurred. (3)) When the investment asset accounts decreased, net cash inflows have occurred. (4). When the investment asset accounts decrease, net cash outflows have occurred.

Almost all U.S. companies have used the indirect method of preparing the statement of cash flows:

The reporting of financing activities is identical under the indirect and direct methods for the Statement of Cash Flows.

A company bought $250,000 of equipment with an expected life of ten years and no residual value. After six years the company sold the equipment for $94,000. If it uses straight-line depreciation and the indirect method is used to determine net cash flows from operating activities, which of the following reflects how the sale of the equipment would be reported in the statement of cash flows?

When the direct method is used to determine the net cash flow from operating activities, other operating expenses are converted into cash outflows by:

Interest and dividends from investments held by a company are reported as cash inflows from investing activities on the statement of cash flows.

A company has a net cash inflow from operating activities of $789,000, a net cash outflow of $50,000 from investing activities and a net cash inflow of $100,000 from financing activities. The company paid $124,000 in interest, $186,500 in income taxes, and $200,000 in dividends. Which of the following statements about the Statement of Cash Flows is NOT true: