Question 1

Companies determine cash provided by operating activities by converting net income on an accrual basis to a cash basis.

Accepted Answer

A) True 
 B)False

Question 2

Within the statement of financial position where should the account non-controlling interest (minority interest) be reported?

Accepted Answer

A) Non-current assets. 
B) Non-current liabilities. 
C) Equity. 
D) Current liabilities. 
A) Non-current assets. 
B) Non-current liabilities. 
C) Equity. 
D) Current liabilities.

Question 3

Significant financing and investing activities that do not affect cash are not reported in the statement of cash flows or any other place.

Accepted Answer

A) True 
 B)False

Question 4

The statement of cash flows reports all of the following except

Accepted Answer

A) the net change in cash for the period. 
B) the cash effects of operations during the period. 
C) the free cash flows generated during the period. 
D) investing transactions. 
A) the net change in cash for the period. 
B) the cash effects of operations during the period. 
C) the free cash flows generated during the period. 
D) investing transactions.

Question 5

On the statement of financial position, an adjunct account reduces either an asset, a liability, or an owners' equity account.

Accepted Answer

A) True 
 B)False

Question 6

A general description of the depreciation methods applicable to major classes of depreci-able assets

Accepted Answer

A) is not a current practice in financial reporting. 
B) is not essential to a fair presentation of financial position. 
C) is needed in financial reporting when company policy differs from income tax policy. 
D) should be included in corporate financial statements or notes thereto. 
A) is not a current practice in financial reporting. 
B) is not essential to a fair presentation of financial position. 
C) is needed in financial reporting when company policy differs from income tax policy. 
D) should be included in corporate financial statements or notes thereto.

Question 7

The current assets section of the statement of financial position should include

Accepted Answer

A) machinery. 
B) patents. 
C) goodwill. 
D) inventory. 
A) machinery. 
B) patents. 
C) goodwill. 
D) inventory.

Question 8

The primary purpose of a statement of cash flows is to report the cash effects of operations during a period.

Accepted Answer

A) True 
 B)False

Question 9

Presented below are data for Bandkok Corp.   Shareholders' Equity at January 1, 2012 is

Accepted Answer

A) Rp1,890. 
B) Rp1,998. 
C) Rp3,132. 
D) Rp3,186. 
A) Rp1,890. 
B) Rp1,998. 
C) Rp3,132. 
D) Rp3,186.

Question 10

In a statement of cash flows, proceeds from issuing equity instruments should be classified as cash inflows from

Accepted Answer

A) lending activities. 
B) operating activities. 
C) investing activities. 
D) financing activities. 
A) lending activities. 
B) operating activities. 
C) investing activities. 
D) financing activities.

Question 11

The correct order to present current assets is

Accepted Answer

A) cash, accounts receivable, prepaid items, inventories. 
B) inventories, receivables, prepaid items, cash. 
C) cash, inventories, accounts receivable, prepaid items. 
D) inventories, prepaid items, accounts receivable, cash. 
A) cash, accounts receivable, prepaid items, inventories. 
B) inventories, receivables, prepaid items, cash. 
C) cash, inventories, accounts receivable, prepaid items. 
D) inventories, prepaid items, accounts receivable, cash.

Question 12

Which of the following is a current asset?

Accepted Answer

A) Cash surrender value of a life insurance policy of which the company is the bene-ficiary. 
B) Investment in equity securities for the purpose of controlling the issuing company. 
C) Cash designated for the purchase of tangible fixed assets. 
D) Trade installment receivables normally collectible in 18 months. 
A) Cash surrender value of a life insurance policy of which the company is the bene-ficiary. 
B) Investment in equity securities for the purpose of controlling the issuing company. 
C) Cash designated for the purchase of tangible fixed assets. 
D) Trade installment receivables normally collectible in 18 months.

Question 13

The statement of financial position can help assess all of the following except

Accepted Answer

A) Solvency. 
B) Financial flexibility. 
C) Profitability. 
D) Liquidity. 
A) Solvency. 
B) Financial flexibility. 
C) Profitability. 
D) Liquidity.

Question 14

Packard Corporation reports the following information:   Packard's free cash flow is

Accepted Answer

A) $10,000. 
B) $45,000. 
C) $105,000. 
D) $155,000. 
A) $10,000. 
B) $45,000. 
C) $105,000. 
D) $155,000.

Question 15

Preparing the statement of cash flows, using the indirect method, involves all of the following except determining the

Accepted Answer

A) cash provided by operations. 
B) cash provided by or used in investing and financing activities. 
C) change in cash during the period. 
D) cash collections from customers during the period. 
A) cash provided by operations. 
B) cash provided by or used in investing and financing activities. 
C) change in cash during the period. 
D) cash collections from customers during the period.

Question 16

Which of the following should be excluded from long-term liabilities?

Accepted Answer

A) Obligations payable at some date beyond the operating cycle 
B) Most pension obligations 
C) Non-current liabilities that mature within the operating cycle and will be paid from a sinking fund 
D) None of these 
A) Obligations payable at some date beyond the operating cycle 
B) Most pension obligations 
C) Non-current liabilities that mature within the operating cycle and will be paid from a sinking fund 
D) None of these

Question 17

Harding Corporation reports the following information:   Harding should report cash provided by operating activities of

Accepted Answer

A) R300,000. 
B) R420,000. 
C) R580,000. 
D) R700,000. 
A) R300,000. 
B) R420,000. 
C) R580,000. 
D) R700,000.

Question 18

During 2010 the DLD Company had a net income of W50,000.In addition, selected accounts showed the following changes:   What was the amount of cash provided by operating activities?

Accepted Answer

A) W49,500 
B) W50,000 
C) W51,500 
D) W59,500 
A) W49,500 
B) W50,000 
C) W51,500 
D) W59,500

Question 19

Olmsted Company has the following items: share capital-ordinary, $720,000; treasury shares, $85,000; deferred taxes, $100,000 and retained earnings, $363,000.What total amount should Olmsted Company report as shareholders' equity?

Accepted Answer

A) $898,000. 
B) $998,000. 
C) $1,098,000. 
D) $1,198,000. 
A) $898,000. 
B) $998,000. 
C) $1,098,000. 
D) $1,198,000.

Question 20

In preparing a statement of cash flows, which of the following transactions would be considered an investing activity?

Accepted Answer

A) Sale of equipment at book value 
B) Sale of merchandise on credit 
C) Declaration of a cash dividend 
D) Issuance of bonds payable at a discount 
A) Sale of equipment at book value 
B) Sale of merchandise on credit 
C) Declaration of a cash dividend 
D) Issuance of bonds payable at a discount

Exam 5: Statement of Financial Position and Statement of Cash Flows

Companies determine cash provided by operating activities by converting net income on an accrual basis to a cash basis.

Within the statement of financial position where should the account non-controlling interest (minority interest) be reported?

Significant financing and investing activities that do not affect cash are not reported in the statement of cash flows or any other place.

The statement of cash flows reports all of the following except

On the statement of financial position, an adjunct account reduces either an asset, a liability, or an owners' equity account.

A general description of the depreciation methods applicable to major classes of depreci-able assets

The current assets section of the statement of financial position should include

The primary purpose of a statement of cash flows is to report the cash effects of operations during a period.

Presented below are data for Bandkok Corp. Shareholders' Equity at January 1, 2012 is

In a statement of cash flows, proceeds from issuing equity instruments should be classified as cash inflows from

The correct order to present current assets is

Which of the following is a current asset?

The statement of financial position can help assess all of the following except

Packard Corporation reports the following information: Packard's free cash flow is

Preparing the statement of cash flows, using the indirect method, involves all of the following except determining the

Which of the following should be excluded from long-term liabilities?

Harding Corporation reports the following information: Harding should report cash provided by operating activities of

During 2010 the DLD Company had a net income of W50,000.In addition, selected accounts showed the following changes: What was the amount of cash provided by operating activities?

Olmsted Company has the following items: share capital-ordinary, $720,000; treasury shares, $85,000; deferred taxes, $100,000 and retained earnings, $363,000.What total amount should Olmsted Company report as shareholders' equity?

In preparing a statement of cash flows, which of the following transactions would be considered an investing activity?

Financial Accounting and Accounting Standards

Conceptual Framework Underlying Financial Accounting

The Accounting Information System

Income Statement and Related Information

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Intangible Assets

Current Liabilities, Provisions, and Contingencies

Non-Current Liabilities

Equity

Dilutive Securities and Earnings Per Share

Investments

Revenue

Accounting for Income Taxes

Accounting for Pensions and Postretirement Benefits

Accounting for Leases

Accounting Changes and Error Analysis

Statement of Cash Flows

Presentation and Disclosure in Financial Reporting

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