Question 1

If ordinary shares were issued to acquire an CHF8,000 machine, how would the transaction appear on the statement of cash flows?

Accepted Answer

A) It would depend on whether or not the direct method or the indirect method was used. 
B) It would be a positive CHF8,000 in the financing section and a negative CHF8,000 in the investing section. 
C) It would be a negative CHF8,000 in the financing section and a positive CHF8,000 in the investing section. 
D) It would not appear on the statement of cash flows but rather in a cash flow note. 
A) It would depend on whether or not the direct method or the indirect method was used. 
B) It would be a positive CHF8,000 in the financing section and a negative CHF8,000 in the investing section. 
C) It would be a negative CHF8,000 in the financing section and a positive CHF8,000 in the investing section. 
D) It would not appear on the statement of cash flows but rather in a cash flow note.

Question 2

The statement of cash flows reports only the cash effects of operations during a period and financing transactions.

Accepted Answer

A) True 
 B)False

Question 3

Net cash provided by operating activities divided by average total liabilities equals

Accepted Answer

A) current cash debt coverage. 
B) cash debt coverage. 
C) free cash flow. 
D) the current ratio. 
A) current cash debt coverage. 
B) cash debt coverage. 
C) free cash flow. 
D) the current ratio.

Question 4

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

Accepted Answer

A) $70,000. 
B) $105,000. 
C) $165,000. 
D) $215,000. 
A) $70,000. 
B) $105,000. 
C) $165,000. 
D) $215,000.

Question 5

Which of the following is not a long-term investment?

Accepted Answer

A) Investments in ordinary shares 
B) Franchise 
C) Land held for speculation 
D) A sinking fund 
A) Investments in ordinary shares 
B) Franchise 
C) Land held for speculation 
D) A sinking fund

Question 6

Which item below is not a current liability?

Accepted Answer

A) Unearned revenue 
B) Share dividends distributable 
C) The currently maturing portion of long-term debt 
D) Trade accounts payable 
A) Unearned revenue 
B) Share dividends distributable 
C) The currently maturing portion of long-term debt 
D) Trade accounts payable

Question 7

Houghton Company has the following items: share capital-ordinary, $820,000; treasury shares, $85,000; deferred taxes, $100,000 and retained earnings, $313,000.What amount should Houghton Company report as total equity?

Accepted Answer

A) $948,000. 
B) $1,048,000. 
C) $1,148,000. 
D) $1,218,000. 
A) $948,000. 
B) $1,048,000. 
C) $1,148,000. 
D) $1,218,000.

Question 8

On the statement of financial position all of the following are reported as investments except

Accepted Answer

A) Bonds, ordinary shares, and long-term notes. 
B) Non-controlling interest. 
C) Pension funds. 
D) Non-consolidated subsidiaries. 
A) Bonds, ordinary shares, and long-term notes. 
B) Non-controlling interest. 
C) Pension funds. 
D) Non-consolidated subsidiaries.

Question 9

A limitation of the balance sheet that is not also a limitation of the income statement is

Accepted Answer

A) the use of judgments and estimates 
B) omitted items 
C) the numbers are affected by the accounting methods employed 
D) valuation of items at historical cost 
A) the use of judgments and estimates 
B) omitted items 
C) the numbers are affected by the accounting methods employed 
D) valuation of items at historical cost

Question 10

Which of the following should be reported for share capital?

Accepted Answer

A) The shares authorized 
B) The shares issued 
C) The shares outstanding 
D) All of these choices are correct. 
A) The shares authorized 
B) The shares issued 
C) The shares outstanding 
D) All of these choices are correct.

Question 11

The presentation of non-current liabilities in the statement of financial position should disclose

Accepted Answer

A) maturity dates. 
B) interest rates. 
C) conversion rights. 
D) All of these choices are correct. 
A) maturity dates. 
B) interest rates. 
C) conversion rights. 
D) All of these choices are correct.

Question 12

Which of the following is a contra account?

Accepted Answer

A) Premium on bonds payable 
B) Unearned service revenue 
C) Patents 
D) Accumulated depreciation 
A) Premium on bonds payable 
B) Unearned service revenue 
C) Patents 
D) Accumulated depreciation

Question 13

In preparing a statement of cash flows, cash flows from operating activities

Accepted Answer

A) are always equal to accrual accounting income. 
B) are calculated as the difference between revenues and expenses. 
C) can be calculated by appropriately adding to or deducting from net income those items in the income statement that do not affect cash. 
D) can be calculated by appropriately adding to or deducting from net income those items in the income statement that do affect cash. 
A) are always equal to accrual accounting income. 
B) are calculated as the difference between revenues and expenses. 
C) can be calculated by appropriately adding to or deducting from net income those items in the income statement that do not affect cash. 
D) can be calculated by appropriately adding to or deducting from net income those items in the income statement that do affect cash.

Question 14

Cash debt coverage is computed by dividing net cash provided by operating activities by

Accepted Answer

A) average non-current liabilities. 
B) average total liabilities. 
C) ending non-current liabilities. 
D) ending total liabilities. 
A) average non-current liabilities. 
B) average total liabilities. 
C) ending non-current liabilities. 
D) ending total liabilities.

Question 15

Keisler Corporation reports:   What is Keisler's ending cash balance?

Accepted Answer

A) TL250,000. 
B) TL320,000. 
C) TL470,000. 
D) TL540,000. 
A) TL250,000. 
B) TL320,000. 
C) TL470,000. 
D) TL540,000.

Question 16

Under IFRS an adjunct account on the statement of financial position increases an asset, liability, or equity account.

Accepted Answer

A) True 
 B)False

Question 17

Companies may use parenthetical explanations, notes, cross references, and supporting schedules to disclose pertinent information.

Accepted Answer

A) True 
 B)False

Question 18

Under IFRS non-cash activities are reported as either investing or financing activities in the body of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 19

On the statement of cash flows, which of the following items will affect both financing activities and operating activities?

Accepted Answer

A) Issuance of equity securities. 
B) Collection of loans to other entities. 
C) Payment of dividends. 
D) Redemption of debt. 
A) Issuance of equity securities. 
B) Collection of loans to other entities. 
C) Payment of dividends. 
D) Redemption of debt.

Question 20

Caroline, Inc.hired a new controller in late 2015.The controller has not prepared financial statements using IFRS before and needs your assistance.In compiling a complete set of financial statements under IFRS, in what order should the following items be reported in the equity section on the statement of financial position at December 31, 2015? If an item is not reported in the equity section, omit it from your answer.
I.Share premium
II.Retained earnings
III.Investments
IV.Non-controlling interest
V.Accumulated comprehensive income
VI.Share capital

Accepted Answer

A) I, VI, IV, II, V, III 
B) VI, I, II, V, IV 
C) VI, I, IV, II, V 
D) III, VI, I, II, IV, V 
A) I, VI, IV, II, V, III 
B) VI, I, II, V, IV 
C) VI, I, IV, II, V 
D) III, VI, I, II, IV, V

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

If ordinary shares were issued to acquire an CHF8,000 machine, how would the transaction appear on the statement of cash flows?

The statement of cash flows reports only the cash effects of operations during a period and financing transactions.

Net cash provided by operating activities divided by average total liabilities equals

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

Which of the following is not a long-term investment?

Which item below is not a current liability?

Houghton Company has the following items: share capital-ordinary, $820,000; treasury shares, $85,000; deferred taxes, $100,000 and retained earnings, $313,000.What amount should Houghton Company report as total equity?

On the statement of financial position all of the following are reported as investments except

A limitation of the balance sheet that is not also a limitation of the income statement is

Which of the following should be reported for share capital?

The presentation of non-current liabilities in the statement of financial position should disclose

Which of the following is a contra account?

In preparing a statement of cash flows, cash flows from operating activities

Cash debt coverage is computed by dividing net cash provided by operating activities by

Keisler Corporation reports: What is Keisler's ending cash balance?

Under IFRS an adjunct account on the statement of financial position increases an asset, liability, or equity account.

Companies may use parenthetical explanations, notes, cross references, and supporting schedules to disclose pertinent information.

Under IFRS non-cash activities are reported as either investing or financing activities in the body of the statement of cash flows.

On the statement of cash flows, which of the following items will affect both financing activities and operating activities?

Financial Reporting and Accounting Standards

Conceptual Framework for Financial Reporting

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 Recognition

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 Financialreporting

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