Question 1

Accounting standards:

Accepted Answer

A) Require that companies omit the statement of cash flows from a complete set of financial statements if the company has no investing activities. 
B) Allow companies to omit the statement of cash flows from a complete set of financial statements if cash is an insignificant asset. 
C) Allow companies to include the statement of cash flows in a complete set of financial statements if the cash balance makes up more than 50% of the current assets. 
D) Require that companies include a statement of cash flows in a complete set of financial statements. 
E) Allow companies to omit the statement of cash flows from a complete set of financial statements if the company has no financing activities. 
A) Require that companies omit the statement of cash flows from a complete set of financial statements if the company has no investing activities. 
B) Allow companies to omit the statement of cash flows from a complete set of financial statements if cash is an insignificant asset. 
C) Allow companies to include the statement of cash flows in a complete set of financial statements if the cash balance makes up more than 50% of the current assets. 
D) Require that companies include a statement of cash flows in a complete set of financial statements. 
E) Allow companies to omit the statement of cash flows from a complete set of financial statements if the company has no financing activities.

Question 2

Analysis reveals that a company had a net increase in cash of $20,000 for the current year. Net cash provided by operating activities was $18,000; net cash used in investing activities was $10,000 and net cash provided by financing activities was $12,000. If the year-end cash balance is $24,000, the beginning cash balance was:

Accepted Answer

A) $40,000. 
B) $4,000. 
C) $44,000. 
D) $39,000. 
E) $16,000. 
A) $40,000. 
B) $4,000. 
C) $44,000. 
D) $39,000. 
E) $16,000.

Question 3

Since it is recommended by the FASB, the direct method of preparing the statement of cash flows is most frequently used.

Accepted Answer

A) True 
 B)False

Question 4

When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from financing activities generally affect:

Accepted Answer

A) Both noncurrent assets and noncurrent liabilities. 
B) Noncurrent assets. 
C) Net income, current assets, and current liabilities. 
D) Noncurrent liability and equity accounts. 
E) Equity accounts only. 
A) Both noncurrent assets and noncurrent liabilities. 
B) Noncurrent assets. 
C) Net income, current assets, and current liabilities. 
D) Noncurrent liability and equity accounts. 
E) Equity accounts only.

Question 5

Bagrov Corporation had a net decrease in cash of $10,000 for the current year. Net cash used in investing activities was $52,000 and net cash used in financing activities was $38,000. What amount of cash was provided (used)in operating activities?

Accepted Answer

A) $80,000 provided. 
B) $100,000 provided. 
C) $(100,000)used. 
D) $(10,000)used. 
E) $(80,000)used. 
A) $80,000 provided. 
B) $100,000 provided. 
C) $(100,000)used. 
D) $(10,000)used. 
E) $(80,000)used.

Question 6

The direct method for the preparation of the operating activities section of the statement of cash flows:

Accepted Answer

A) Reports adjustments to reconcile net income to net cash provided or used by operating activities in the statement. 
B) Is required by the FASB. 
C) Reports a different amount of cash flows from operations than if the indirect method is used. 
D) Separately lists each major item of operating cash receipts and cash payments. 
E) Is required if the company is a merchandiser. 
A) Reports adjustments to reconcile net income to net cash provided or used by operating activities in the statement. 
B) Is required by the FASB. 
C) Reports a different amount of cash flows from operations than if the indirect method is used. 
D) Separately lists each major item of operating cash receipts and cash payments. 
E) Is required if the company is a merchandiser.

Question 7

The appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is:

Accepted Answer

A) Schedule of noncash investing or financing activity. 
B) Financing activities. 
C) This is not reported on the statement of cash flows. 
D) Investing activities. 
E) Operating activities. 
A) Schedule of noncash investing or financing activity. 
B) Financing activities. 
C) This is not reported on the statement of cash flows. 
D) Investing activities. 
E) Operating activities.

Question 8

When preparing the operating activities section of the statement of cash flows using the direct method, non-operating losses are added to net income.

Accepted Answer

A) True 
 B)False

Question 9

Common uses of the statement of cash flows include all but which of the following?

Accepted Answer

A) Investor assessment of cash flows before buying and selling stock. 
B) Management prediction of future cash flows for decision making. 
C) Management determination of the specific sources and uses of cash. 
D) Creditor evaluation of a company's ability to generate cash to cover debt. 
E) Government assessment of whether company is able to pay taxes as they become due. 
A) Investor assessment of cash flows before buying and selling stock. 
B) Management prediction of future cash flows for decision making. 
C) Management determination of the specific sources and uses of cash. 
D) Creditor evaluation of a company's ability to generate cash to cover debt. 
E) Government assessment of whether company is able to pay taxes as they become due.

Question 10

A company's transactions with its creditors to borrow money and/or to repay the principal amounts of both short- and long-term debt are reported as cash flows from:

Accepted Answer

A) Investing activities. 
B) Direct activities. 
C) Operating activities. 
D) Indirect activities. 
E) Financing activities. 
A) Investing activities. 
B) Direct activities. 
C) Operating activities. 
D) Indirect activities. 
E) Financing activities.

Question 11

The cash flows from operating activities section of an indirect method of cash flows begins with net income or loss.

Accepted Answer

A) True 
 B)False

Question 12

The accountant for Crusoe Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: $\begin{array}{l|r}
\hline \text { Retained earnings balance at the beginning of the year } & \$ 126,000 \
\hline \text { Cash dividends declared for the year } & 46,000 \
\hline \text { Proceeds from the sale of equipment } & 81,000 \
\hline \text { Gain on the sale of equipment } & 7,000 \
\hline \text { Cash dividends payable at the beginning of the year } & 18,000 \
\hline \text { Cash dividends payable at the end of the year } & 20,000 \
\hline \text { Net income for the year } & 92,000
\end{array}$ The amount of cash dividends paid during the year would be:

Accepted Answer

A) $44,000. 
B) $64,000. 
C) $48,000. 
D) $46,000. 
E) $8,000. 
A) $44,000. 
B) $64,000. 
C) $48,000. 
D) $46,000. 
E) $8,000.

Question 13

When preparing the operating activities section of the statement of cash flows using the indirect method, decreases in current operating assets are subtracted from net income.

Accepted Answer

A) True 
 B)False

Question 14

A company had net cash flows from operations of $341,000, net income of $286,000 and average total assets of $1,850,000. The cash flow on total assets ratio equals:

Accepted Answer

A) 646.9% 
B) 15.5% 
C) 83.9% 
D) 542.5% 
E) 18.4% 
A) 646.9% 
B) 15.5% 
C) 83.9% 
D) 542.5% 
E) 18.4%

Question 15

Define and explain significant noncash investing and financing activities and the method of reporting them on the statement of cash flows.

Accepted Answer

Noncash investing and financing activiti

Question 16

When preparing the operating activities section of the statement of cash flows using the indirect method, depreciation is subtracted from net income.

Accepted Answer

A) True 
 B)False

Question 17

The accountant for Huckleberry Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: $\begin{array}{l|r}
\text { Retained earnings balance at the beginning of the year } &\$ 151,000 \
\hline \text { Cash dividends declared for the year }&46,000 \
\hline \text { Net income for the year }&92,000
\end{array}$
What is the ending balance for retained earnings?
A) $ \$ 243,000 $
B) $ \$ 197,000 $.
C) $ \$ 105,000 $.
D) $ \$ 13,000 $.
E) $ \$ 264,000 $

Accepted Answer

The answer of The accountant for Huckleberry Company is preparing...

Question 18

A spreadsheet can help organize the information needed to prepare a statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 19

In preparing a company's statement of cash flows for the most recent year using the indirect method, the following information is available: $$\begin{array} { l | r } 
\text { Net income for the year was } & \$ 52,000 \
\hline \text { Accounts payable increased by } & 18,000 \
\hline \text { Accounts receivable decreased by } & 25,000 \
\hline \text { Inventories increased by } & 5,000 \
\hline \text { Depreciation expense was } & 30,000
\end{array}$$ Net cash provided by operating activities was:

Accepted Answer

A) $60,000. 
B) $70,000. 
C) $130,000. 
D) $80,000. 
E) $120,000. 
A) $60,000. 
B) $70,000. 
C) $130,000. 
D) $80,000. 
E) $120,000.

Question 20

Northington, Inc. is preparing the company's statement of cash flows for the fiscal year just ended. Using the following information, determine the amount of cash flows from investing activities:
Payment of cash dividends 32,000

Accepted Answer

A) ($200,000). 
B) ($139,700). 
C) ($107,700). 
D) $107,700. 
E) ($207,700). 
A) ($200,000). 
B) ($139,700). 
C) ($107,700). 
D) $107,700. 
E) ($207,700).

Accounting standards:

Since it is recommended by the FASB, the direct method of preparing the statement of cash flows is most frequently used.

When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from financing activities generally affect:

Bagrov Corporation had a net decrease in cash of $10,000 for the current year. Net cash used in investing activities was $52,000 and net cash used in financing activities was $38,000. What amount of cash was provided (used)in operating activities?

The direct method for the preparation of the operating activities section of the statement of cash flows:

The appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is:

When preparing the operating activities section of the statement of cash flows using the direct method, non-operating losses are added to net income.

Common uses of the statement of cash flows include all but which of the following?

A company's transactions with its creditors to borrow money and/or to repay the principal amounts of both short- and long-term debt are reported as cash flows from:

The cash flows from operating activities section of an indirect method of cash flows begins with net income or loss.

When preparing the operating activities section of the statement of cash flows using the indirect method, decreases in current operating assets are subtracted from net income.

A company had net cash flows from operations of $341,000, net income of $286,000 and average total assets of $1,850,000. The cash flow on total assets ratio equals:

Define and explain significant noncash investing and financing activities and the method of reporting them on the statement of cash flows.

When preparing the operating activities section of the statement of cash flows using the indirect method, depreciation is subtracted from net income.

A spreadsheet can help organize the information needed to prepare a statement of cash flows.

Northington, Inc. is preparing the company's statement of cash flows for the fiscal year just ended. Using the following information, determine the amount of cash flows from investing activities: Payment of cash dividends 32,000

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resoures, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Analysis of Financial Statements

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Exam 16: Reporting the Statement of Cash Flows

Accounting standards:

Since it is recommended by the FASB, the direct method of preparing the statement of cash flows is most frequently used.

When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from financing activities generally affect:

Bagrov Corporation had a net decrease in cash of $10,000 for the current year. Net cash used in investing activities was $52,000 and net cash used in financing activities was $38,000. What amount of cash was provided (used)in operating activities?

The direct method for the preparation of the operating activities section of the statement of cash flows:

The appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is:

When preparing the operating activities section of the statement of cash flows using the direct method, non-operating losses are added to net income.

Common uses of the statement of cash flows include all but which of the following?

A company's transactions with its creditors to borrow money and/or to repay the principal amounts of both short- and long-term debt are reported as cash flows from:

The cash flows from operating activities section of an indirect method of cash flows begins with net income or loss.

When preparing the operating activities section of the statement of cash flows using the indirect method, decreases in current operating assets are subtracted from net income.

A company had net cash flows from operations of $341,000, net income of $286,000 and average total assets of $1,850,000. The cash flow on total assets ratio equals:

Define and explain significant noncash investing and financing activities and the method of reporting them on the statement of cash flows.

When preparing the operating activities section of the statement of cash flows using the indirect method, depreciation is subtracted from net income.

A spreadsheet can help organize the information needed to prepare a statement of cash flows.

Northington, Inc. is preparing the company's statement of cash flows for the fiscal year just ended. Using the following information, determine the amount of cash flows from investing activities: Payment of cash dividends 32,000

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resoures, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Analysis of Financial Statements

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