Question 1

Which of the following items involving current trade accounts receivable is most likely to appear in a statement of cash flows?

Accepted Answer

A) The balance in the allowance for doubtful accounts 
B) The change in net sales 
C) Sales returns and allowances 
D) Collection of an account previously written off 
A) The balance in the allowance for doubtful accounts 
B) The change in net sales 
C) Sales returns and allowances 
D) Collection of an account previously written off D

Question 2

Which of the following is NOT added to net income as an adjustment to reconcile net income to cash from operating activities on the statement of cash flows?

Accepted Answer

A) Increase in an accrued liability 
B) Amortization of discount on bond payable 
C) Loss on sale of operational asset 
D) Increase in deferred tax asset 
A) Increase in an accrued liability 
B) Amortization of discount on bond payable 
C) Loss on sale of operational asset 
D) Increase in deferred tax asset D

Question 3

A loss on the sale of machinery in the ordinary course of business should be presented in a statement of cash flows prepared under the indirect method as a(n)

Accepted Answer

A) inflow from operating activities. 
B) inflow from investing activities. 
C) adjustment to reconcile net income to cash from operating activities. 
D) outflow from investing activities. 
A) inflow from operating activities. 
B) inflow from investing activities. 
C) adjustment to reconcile net income to cash from operating activities. 
D) outflow from investing activities. C

Question 4

Which of the following would NOT be a cash flow from financing activities for Carlton Company?

Accepted Answer

A) Cash from issuance of Carlton Co. common stock 
B) Cash from issuance of Carlton Co. preferred stock 
C) Cash from issuance of Carlton Co. bonds payable 
D) Cash from sale of Fern Company common stock 
A) Cash from issuance of Carlton Co. common stock 
B) Cash from issuance of Carlton Co. preferred stock 
C) Cash from issuance of Carlton Co. bonds payable 
D) Cash from sale of Fern Company common stock

Question 5

Choose the combination that best reflects the appropriate classification of cash paid for investing and financing activities.

Accepted Answer

The answer of Choose the combination that best reflects the...

Question 6

The amortization of bond discount related to long-term debt should be presented in a statement of cash flows prepared using the indirect method as a(n)

Accepted Answer

A) addition to net income in the adjustments to reconcile net income to cash from operating activities. 
B) deduction from net income in the adjustments to reconcile net income to cash from operating activities. 
C) outflow of cash. 
D) inflow and outflow of cash. 
A) addition to net income in the adjustments to reconcile net income to cash from operating activities. 
B) deduction from net income in the adjustments to reconcile net income to cash from operating activities. 
C) outflow of cash. 
D) inflow and outflow of cash.

Question 7

Which of the following causes a change in the amount of cash held by a company?

Accepted Answer

A) Write-off of a bad debt 
B) Declaration of a cash dividend 
C) Payment of a cash dividend declared in a previous period 
D) Declaration and issuance of a stock dividend 
A) Write-off of a bad debt 
B) Declaration of a cash dividend 
C) Payment of a cash dividend declared in a previous period 
D) Declaration and issuance of a stock dividend

Question 8

A firm's accumulated depreciation account increased $30,000 for the year and total plant assets at cost increased $200,000.During the year,the firm purchased $350,000 of new equipment for cash,and sold equipment for $50,000 cash.This equipment had been depreciated $30,000 at the time of the sale.What is the complete disclosure of these events in the statement of cash flows prepared under the direct method?

Accepted Answer

A) $300,000 investing cash outflow; $130,000 addition reconciling adjustment 
B) $350,000 investing cash outflow; $50,000 investing cash inflow; $60,000 addition reconciling adjustment 
C) $350,000 investing cash outflow; $50,000 investing cash inflow; $60,000 addition reconciling adjustment; $70,000 addition reconciling adjustment 
D) $350,000 investing cash outflow; $50,000 investing cash inflow; $70,000 addition reconciling adjustment 
A) $300,000 investing cash outflow; $130,000 addition reconciling adjustment 
B) $350,000 investing cash outflow; $50,000 investing cash inflow; $60,000 addition reconciling adjustment 
C) $350,000 investing cash outflow; $50,000 investing cash inflow; $60,000 addition reconciling adjustment; $70,000 addition reconciling adjustment 
D) $350,000 investing cash outflow; $50,000 investing cash inflow; $70,000 addition reconciling adjustment

Question 9

What is the effect of the sale of $5,000 worth of cash equivalents at cost in the statement of cash flows prepared under the direct method?

Accepted Answer

A) Add $5,000 in the reconciliation 
B) $5,000 investing cash inflow 
C) $5,000 operating cash inflow 
D) No disclosure 
A) Add $5,000 in the reconciliation 
B) $5,000 investing cash inflow 
C) $5,000 operating cash inflow 
D) No disclosure

Question 10

Cash inflows from investing activities would include all of the following except

Accepted Answer

A) interest collect on notes receivable. 
B) proceeds from sale of investments accounted for by the equity method. 
C) proceeds from sale of operating assets. 
D) proceeds from sale of securities available for sale. 
A) interest collect on notes receivable. 
B) proceeds from sale of investments accounted for by the equity method. 
C) proceeds from sale of operating assets. 
D) proceeds from sale of securities available for sale.

Question 11

A company sold an investment in trading securities originally costing $30,000,for $28,000.At the beginning of the year,the investment had a valuation allowance of $3,000,debit.What is the correct disclosure for these events on the statement of cash flows prepared under the direct method,assuming that this is the only investment in trading securities?

Accepted Answer

A) $28,000 operating cash inflow; add $5,000 in the reconciliation of earnings and net operating cash flow 
B) $28,000 operating cash inflow 
C) $28,000 operating cash inflow; add $33,000 in the reconciliation of earnings and net operating cash flow 
D) Add $5,000 in the reconciliation of earnings and net operating cash flow. 
A) $28,000 operating cash inflow; add $5,000 in the reconciliation of earnings and net operating cash flow 
B) $28,000 operating cash inflow 
C) $28,000 operating cash inflow; add $33,000 in the reconciliation of earnings and net operating cash flow 
D) Add $5,000 in the reconciliation of earnings and net operating cash flow.

Question 12

At the beginning of the year,a firm leased equipment on a capital lease,capitalizing $60,000 in both its lease liability and leased assets accounts.The contract calls for December 31 payments of $15,000.The lessee's annual reporting period ends December 31 and the contract reflects 10% interest.The lessee made the first payment as required.The direct method statement of cash flows for the lessee should reflect which of the following in the first year of the lease contract (ignore noncash disclosures)?

Accepted Answer

A) $15,000 financing cash outflow 
B) $15,000 operating cash outflow 
C) $6,000 operating cash outflow; $9,000 financing cash outflow 
D) $9,000 financing cash outflow 
A) $15,000 financing cash outflow 
B) $15,000 operating cash outflow 
C) $6,000 operating cash outflow; $9,000 financing cash outflow 
D) $9,000 financing cash outflow

Question 13

Which of the following need not be disclosed in a statement of cash flows as a noncash exchange?

Accepted Answer

A) Dividend paid in capital stock of the company (stock dividend). 
B) Acquisition of fixed assets in exchange for capital stock 
C) Retirement of a bond issue through the issuance of another bond issue 
D) Conversion of convertible debt to capital stock 
A) Dividend paid in capital stock of the company (stock dividend). 
B) Acquisition of fixed assets in exchange for capital stock 
C) Retirement of a bond issue through the issuance of another bond issue 
D) Conversion of convertible debt to capital stock

Question 14

On a statement of cash flows prepared using the direct method,cash from customers would be sales plus a(n)

Accepted Answer

A) decrease in accounts payable. 
B) increase in accounts payable. 
C) decrease in accounts receivable. 
D) increase in accounts receivable. 
A) decrease in accounts payable. 
B) increase in accounts payable. 
C) decrease in accounts receivable. 
D) increase in accounts receivable.

Question 15

Assume Bellini Company holds the following assets at year-end and classifies as cash equivalents everything allowed by professional standards.
 
What would be the total cash equivalents at year-end for Bellini Company?

Accepted Answer

A) $90,000 
B) $115,000 
C) $135,000 
D) $160,000 
A) $90,000 
B) $115,000 
C) $135,000 
D) $160,000

Question 16

Which of the following is a non-cash transaction that should be disclosed in a schedule accompanying the statement of cash flows?

Accepted Answer

A) Sale of an investment for cash 
B) Purchase of a machine for cash 
C) Issuance of common stock in exchange for land 
D) Declaration and payment of a cash dividend on common stock 
A) Sale of an investment for cash 
B) Purchase of a machine for cash 
C) Issuance of common stock in exchange for land 
D) Declaration and payment of a cash dividend on common stock

Question 17

Which of the following is NOT an adjustment to reconcile net income to cash from operating activities?

Accepted Answer

A) Increase or decrease in an accrued liability 
B) Amortization of premium or discount on bonds payable 
C) Cash dividend declared but not yet paid 
D) Increase or decrease in a prepaid expense 
A) Increase or decrease in an accrued liability 
B) Amortization of premium or discount on bonds payable 
C) Cash dividend declared but not yet paid 
D) Increase or decrease in a prepaid expense

Question 18

Under the direct method,cash paid to suppliers can be computed as cost of goods sold for the period

Accepted Answer

A) minus a decrease in inventory and plus an increase in accounts payable. 
B) plus a decrease in inventory and minus an increase in accounts payable. 
C) minus an increase in inventory and plus an increase in accounts payable. 
D) plus an increase in inventory and minus an increase in accounts 
A) minus a decrease in inventory and plus an increase in accounts payable. 
B) plus a decrease in inventory and minus an increase in accounts payable. 
C) minus an increase in inventory and plus an increase in accounts payable. 
D) plus an increase in inventory and minus an increase in accounts

Question 19

The following information for Amphora Company is available at December 31,2014,and for the year then ending:
   
The following information is available for specific accounts and transactions:
1.On February 2,2014,Amphora issued a 10 percent stock dividend to shareholders of record on January 15,2014.Market price per share of the common stock on February 2,2014,was $15.
2.On March 1,2014,Amphora issued 3,800 shares of common stock for land.The common stock had a current market value of approximately $40,000 on March 1,2014.
3.On April 15,2014,Amphora repurchased its long-term bonds payable with a face value of $50,000 for cash.
4.On June 30,2014,Amphora sold for $19,000 cash equipment having a book value of $23,000 and an original cost of $53,000.
5.On September 30,2014,Amphora declared and paid a 4 cent per share cash dividend to shareholders of record on August 1,2014.
6.On October 1,2014,Amphora purchased land for $85,000 cash.
Required:
Prepare a statement of cash flows for Amphora Company for the year ending December 31,2014,using the indirect method.

Accepted Answer

The answer of The following information for Amphora Company is...

Question 20

Cash outflows from investing activities would include payments for all of the following except

Accepted Answer

A) operational assets. 
B) investments in securities-available-for-sale. 
C) purchase of treasury stock. 
D) loans to customers. 
A) operational assets. 
B) investments in securities-available-for-sale. 
C) purchase of treasury stock. 
D) loans to customers.

Which of the following items involving current trade accounts receivable is most likely to appear in a statement of cash flows?

Which of the following is NOT added to net income as an adjustment to reconcile net income to cash from operating activities on the statement of cash flows?

A loss on the sale of machinery in the ordinary course of business should be presented in a statement of cash flows prepared under the indirect method as a(n)

Which of the following would NOT be a cash flow from financing activities for Carlton Company?

Choose the combination that best reflects the appropriate classification of cash paid for investing and financing activities.

The amortization of bond discount related to long-term debt should be presented in a statement of cash flows prepared using the indirect method as a(n)

Which of the following causes a change in the amount of cash held by a company?

What is the effect of the sale of $5,000 worth of cash equivalents at cost in the statement of cash flows prepared under the direct method?

Cash inflows from investing activities would include all of the following except

Which of the following need not be disclosed in a statement of cash flows as a noncash exchange?

On a statement of cash flows prepared using the direct method,cash from customers would be sales plus a(n)

Assume Bellini Company holds the following assets at year-end and classifies as cash equivalents everything allowed by professional standards. What would be the total cash equivalents at year-end for Bellini Company?

Which of the following is a non-cash transaction that should be disclosed in a schedule accompanying the statement of cash flows?

Which of the following is NOT an adjustment to reconcile net income to cash from operating activities?

Under the direct method,cash paid to suppliers can be computed as cost of goods sold for the period

Cash outflows from investing activities would include payments for all of the following except

Financial Reporting

A Review of the Accounting Cycle

The Balance Sheet and Notes to the Financial Statements

The Income Statement

Statement of Cash Flows and Articulation

Earnings Management

The Revenuereceivablescash Cycle

Revenue Recognition

Inventory and Cost of Goods Sold

Investments in Noncurrent Operating Assets-Acquisition

Investments in Noncurrent Operating Assets-Utilization and Retirement

Debt Financing

Equity Financing

Investments in Debt and Equity Securities

Leases

Income Taxes

Employee Compensation-Payroll,pensions, Other Compissues

Earnings Per Share

Derivatives, contingencies, business Segments, and Interim Reports

Accounting Changes and Error Corrections

Accounting in a Global Market

Analysis of Financial Statements

Filters

Exam 21: Statement of Cash Flows Revisited

Which of the following items involving current trade accounts receivable is most likely to appear in a statement of cash flows?

Which of the following is NOT added to net income as an adjustment to reconcile net income to cash from operating activities on the statement of cash flows?

A loss on the sale of machinery in the ordinary course of business should be presented in a statement of cash flows prepared under the indirect method as a(n)

Which of the following would NOT be a cash flow from financing activities for Carlton Company?

Choose the combination that best reflects the appropriate classification of cash paid for investing and financing activities.

The amortization of bond discount related to long-term debt should be presented in a statement of cash flows prepared using the indirect method as a(n)

Which of the following causes a change in the amount of cash held by a company?

What is the effect of the sale of $5,000 worth of cash equivalents at cost in the statement of cash flows prepared under the direct method?

Cash inflows from investing activities would include all of the following except

Which of the following need not be disclosed in a statement of cash flows as a noncash exchange?

On a statement of cash flows prepared using the direct method,cash from customers would be sales plus a(n)

Assume Bellini Company holds the following assets at year-end and classifies as cash equivalents everything allowed by professional standards. What would be the total cash equivalents at year-end for Bellini Company?

Which of the following is a non-cash transaction that should be disclosed in a schedule accompanying the statement of cash flows?

Which of the following is NOT an adjustment to reconcile net income to cash from operating activities?

Under the direct method,cash paid to suppliers can be computed as cost of goods sold for the period

Cash outflows from investing activities would include payments for all of the following except

Financial Reporting

A Review of the Accounting Cycle

The Balance Sheet and Notes to the Financial Statements

The Income Statement

Statement of Cash Flows and Articulation

Earnings Management

The Revenuereceivablescash Cycle

Revenue Recognition

Inventory and Cost of Goods Sold

Investments in Noncurrent Operating Assets-Acquisition

Investments in Noncurrent Operating Assets-Utilization and Retirement

Debt Financing

Equity Financing

Investments in Debt and Equity Securities

Leases

Income Taxes

Employee Compensation-Payroll,pensions, Other Compissues

Earnings Per Share

Derivatives, contingencies, business Segments, and Interim Reports

Accounting Changes and Error Corrections

Accounting in a Global Market

Analysis of Financial Statements

Filters