Question 1

Major investing and financing activities that do not involve cash do not have to be reported as part of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is included in the financing activities on a statement of cash flows?

Accepted Answer

A)  Changes in accounts payable 
B)  Purchases of equipment 
C)  Paying interest to lenders 
D)  Cash dividends paid 
A)  Changes in accounts payable 
B)  Purchases of equipment 
C)  Paying interest to lenders 
D)  Cash dividends paid

Question 3

Which of the following would be reported as a cash outflow from investing activities?

Accepted Answer

A)  Donating an old piece of equipment to charity 
B)  Repaying the principal of a bond 
C)  Buying another company's bonds with cash 
D)  Acquiring an investment security by issuing company stock 
A)  Donating an old piece of equipment to charity 
B)  Repaying the principal of a bond 
C)  Buying another company's bonds with cash 
D)  Acquiring an investment security by issuing company stock

Question 4

Company X paid Company Y $1.35 million for a new plant.During the same accounting period,Company X experienced the following changes in its balance sheet: Cash decreased by $350,000,Accounts Receivable increased by $321,300,Inventory increased by $275,800,Property,Plant,and Equipment increased by $752,900,and Bonds Payable increased by $1 million.The net cash flow provided by financing activities is:

Accepted Answer

A)  An inflow of $1.35 million. 
B)  An outflow of $350,000. 
C)  An inflow of $1 million. 
D)  An inflow of $752,900. 
A)  An inflow of $1.35 million. 
B)  An outflow of $350,000. 
C)  An inflow of $1 million. 
D)  An inflow of $752,900.

Question 5

Cash flows from financing activities include all of the following except:

Accepted Answer

A)  payment of long-term debt. 
B)  payment of interest. 
C)  proceeds from stock issuance. 
D)  cash dividends paid. 
A)  payment of long-term debt. 
B)  payment of interest. 
C)  proceeds from stock issuance. 
D)  cash dividends paid.

Question 6

Consider the following information:
   
Required:
Use the indirect method to compute the amount of net cash flows provided by (used in)operating activities.

Accepted Answer

The answer of Consider the following information:
   
Required:
Use...

Question 7

During the current year,Todd Electronics had $610,000 in cash sales and $2,220,000 in credit sales.The Accounts Receivable balance was $530,000 at the beginning of the year and $425,000 at the end of the year.What was the total cash collected from customers during the year?

Accepted Answer

A)  $2,935,000 
B)  $2,830,000 
C)  $2,725,000 
D)  $2,325,000 
A)  $2,935,000 
B)  $2,830,000 
C)  $2,725,000 
D)  $2,325,000

Question 8

All of the following might be used to evaluate cash flow performance,except:

Accepted Answer

A)  the absolute amount of cash flow. 
B)  whether cash flow is positive or negative. 
C)  the relationship between net income and cash flow. 
D)  the trend in sales and operating expenses. 
A)  the absolute amount of cash flow. 
B)  whether cash flow is positive or negative. 
C)  the relationship between net income and cash flow. 
D)  the trend in sales and operating expenses.

Question 9

In arriving at cash from operating activities,subtracting a decrease in Salaries and Wages Payable from net income includes the cash effects of transactions that:

Accepted Answer

A)  increased cash, but did not affect net income. 
B)  increased cash and increased net income. 
C)  decreased cash, but did not affect net income. 
D)  decreased cash and decreased net income. 
A)  increased cash, but did not affect net income. 
B)  increased cash and increased net income. 
C)  decreased cash, but did not affect net income. 
D)  decreased cash and decreased net income.

Question 10

Use the information above to answer the following question.What was the amount of cash paid for purchases of equipment during the year?

Accepted Answer

A)  $40,000 
B)  $43,000 
C)  $50,000 
D)  $31,000 
A)  $40,000 
B)  $43,000 
C)  $50,000 
D)  $31,000

Question 11

When using the T-account approach to preparing the indirect method of the statement of cash flows,which of the following would be associated with amounts entered on the credit side of the Cash T-account?

Accepted Answer

A)  Increase in Inventory 
B)  Decrease in Accounts Receivable 
C)  Decrease in Inventory 
D)  Increase in Accrued Liabilities 
A)  Increase in Inventory 
B)  Decrease in Accounts Receivable 
C)  Decrease in Inventory 
D)  Increase in Accrued Liabilities

Question 12

Which of the following are used to determine cash flows from financing activities?

Accepted Answer

A)  Short-term debt, Accrued Liabilities, Common Stock, and Notes Payable 
B)  Long-term debt, Common Stock, and Retained Earnings 
C)  Short-term debt, Accrued Liabilities, Retained Earnings, and Bonds Payable 
D)  Long-term debt, Notes Payable, Interest Expense, and Bonds Payable 
A)  Short-term debt, Accrued Liabilities, Common Stock, and Notes Payable 
B)  Long-term debt, Common Stock, and Retained Earnings 
C)  Short-term debt, Accrued Liabilities, Retained Earnings, and Bonds Payable 
D)  Long-term debt, Notes Payable, Interest Expense, and Bonds Payable

Question 13

The following additional information is available from the financial statements of Hitchens Company:
 
What is the net cash provided by operating activities?

Accepted Answer

A)  $263,000 
B)  $285,000 
C)  $396,000 
D)  $368,000 
A)  $263,000 
B)  $285,000 
C)  $396,000 
D)  $368,000

Question 14

The Extra Surplus Company's Balance Sheet for December 31,2015 and the Income Statement for 2016 are shown below.
   
Additional data:
-Sales were $13,000; $8,000 in cash was received from customers.
-Bought new land for cash,$10,000.
-Sold other land for its book value of $5,000.
-Paid $1,000 principal on the long-term note payable and $1,000 in interest.
-Issued new shares of stock for $10,000 cash.
-Cash dividends of $1,000 were declared and paid to stockholders.
-Paid $5,500 on accounts payable.
-No inventory purchases were made; other expenses were incurred on account.
-All wages were paid in cash.
-Other expenses were on account.
Required:
Part a.Prepare a balance sheet at December 31,2016.
Part b.Prepare the statement of cash flows using the direct method.

Accepted Answer

The answer of The Extra Surplus Company's Balance Sheet for...

Question 15

Which of the following statements about the statement of cash flows is not correct?

Accepted Answer

A)  GAAP requires every company to report a statement of cash flows. 
B)  The statement of cash flows is contained in the notes to the financial statements. 
C)  The statement of cash flows is needed because the income statement and balance sheet do not provide adequate information about the changes in cash. 
D)  The statement of cash flows provides information about how each major type of business activity causes a company's cash to change. 
A)  GAAP requires every company to report a statement of cash flows. 
B)  The statement of cash flows is contained in the notes to the financial statements. 
C)  The statement of cash flows is needed because the income statement and balance sheet do not provide adequate information about the changes in cash. 
D)  The statement of cash flows provides information about how each major type of business activity causes a company's cash to change.

Question 16

Supplemental disclosures required by companies using the indirect method include all of the following except:

Accepted Answer

A)  cash paid for interest. 
B)  cash paid for income tax. 
C)  cash paid for dividends. 
D)  noncash investing and financing activities. 
A)  cash paid for interest. 
B)  cash paid for income tax. 
C)  cash paid for dividends. 
D)  noncash investing and financing activities.

Question 17

The cash flow statement should be evaluated by examining the cash flow pattern suggested by the:

Accepted Answer

A)  subtotals of each of the three main sections. 
B)  operating activities section since this section details the day to day operations of the business. 
C)  change in cash regardless of which section had the biggest impact on the change. 
D)  financing section since this section details how much debt the company has incurred. 
A)  subtotals of each of the three main sections. 
B)  operating activities section since this section details the day to day operations of the business. 
C)  change in cash regardless of which section had the biggest impact on the change. 
D)  financing section since this section details how much debt the company has incurred.

Question 18

Cash flows from operating activities include all of the following except:

Accepted Answer

A)  a purchase of land. 
B)  collections from customers on account. 
C)  payments to employees for hours worked. 
D)  receipt of cash dividends. 
A)  a purchase of land. 
B)  collections from customers on account. 
C)  payments to employees for hours worked. 
D)  receipt of cash dividends.

Question 19

When preparing the operating activities section of the statement of cash flows using the indirect method,a decrease in accounts receivable is subtracted from net income.

Accepted Answer

A) True 
 B)False

Question 20

If the calculation of cash flows from operating activities starts with net income,the company:

Accepted Answer

A)  is using the net income method. 
B)  will remove the effects of all noncash items included in the calculation of net income. 
C)  is using the direct method. 
D)  will add all noncash items not included in the calculation of net income. 
A)  is using the net income method. 
B)  will remove the effects of all noncash items included in the calculation of net income. 
C)  is using the direct method. 
D)  will add all noncash items not included in the calculation of net income.

Major investing and financing activities that do not involve cash do not have to be reported as part of the statement of cash flows.

Which of the following is included in the financing activities on a statement of cash flows?

Which of the following would be reported as a cash outflow from investing activities?

Cash flows from financing activities include all of the following except:

Consider the following information: Required: Use the indirect method to compute the amount of net cash flows provided by (used in)operating activities.

During the current year,Todd Electronics had $610,000 in cash sales and $2,220,000 in credit sales.The Accounts Receivable balance was $530,000 at the beginning of the year and $425,000 at the end of the year.What was the total cash collected from customers during the year?

All of the following might be used to evaluate cash flow performance,except:

In arriving at cash from operating activities,subtracting a decrease in Salaries and Wages Payable from net income includes the cash effects of transactions that:

Use the information above to answer the following question.What was the amount of cash paid for purchases of equipment during the year?

When using the T-account approach to preparing the indirect method of the statement of cash flows,which of the following would be associated with amounts entered on the credit side of the Cash T-account?

Which of the following are used to determine cash flows from financing activities?

The following additional information is available from the financial statements of Hitchens Company: What is the net cash provided by operating activities?

Which of the following statements about the statement of cash flows is not correct?

Supplemental disclosures required by companies using the indirect method include all of the following except:

The cash flow statement should be evaluated by examining the cash flow pattern suggested by the:

Cash flows from operating activities include all of the following except:

When preparing the operating activities section of the statement of cash flows using the indirect method,a decrease in accounts receivable is subtracted from net income.

If the calculation of cash flows from operating activities starts with net income,the company:

Business Decisions and Financial Accounting

Reporting Investing and Financing Results on the Balance Sheet

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Fraud, Internal Control, and Cash

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Measuring and Evaluating Financial Performance

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Exam 12: Reporting and Interpreting the Statement of Cash Flows

Major investing and financing activities that do not involve cash do not have to be reported as part of the statement of cash flows.

Which of the following is included in the financing activities on a statement of cash flows?

Which of the following would be reported as a cash outflow from investing activities?

Cash flows from financing activities include all of the following except:

Consider the following information: Required: Use the indirect method to compute the amount of net cash flows provided by (used in)operating activities.

During the current year,Todd Electronics had $610,000 in cash sales and $2,220,000 in credit sales.The Accounts Receivable balance was $530,000 at the beginning of the year and $425,000 at the end of the year.What was the total cash collected from customers during the year?

All of the following might be used to evaluate cash flow performance,except:

In arriving at cash from operating activities,subtracting a decrease in Salaries and Wages Payable from net income includes the cash effects of transactions that:

Use the information above to answer the following question.What was the amount of cash paid for purchases of equipment during the year?

When using the T-account approach to preparing the indirect method of the statement of cash flows,which of the following would be associated with amounts entered on the credit side of the Cash T-account?

Which of the following are used to determine cash flows from financing activities?

The following additional information is available from the financial statements of Hitchens Company: What is the net cash provided by operating activities?

Which of the following statements about the statement of cash flows is not correct?

Supplemental disclosures required by companies using the indirect method include all of the following except:

The cash flow statement should be evaluated by examining the cash flow pattern suggested by the:

Cash flows from operating activities include all of the following except:

When preparing the operating activities section of the statement of cash flows using the indirect method,a decrease in accounts receivable is subtracted from net income.

If the calculation of cash flows from operating activities starts with net income,the company:

Business Decisions and Financial Accounting

Reporting Investing and Financing Results on the Balance Sheet

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Fraud, Internal Control, and Cash

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Measuring and Evaluating Financial Performance

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