Question 1

The cash flows reported in the financing activities section reveal information about a company's plans for the future.

Accepted Answer

A) True 
 B)False

Question 2

Jill,Inc.earned $950,000 on account during 2011.Customers owed Jill,Inc.$40,000 at December 31,2010 and $50,000 at December 31,2011.For each item,first select the column of the 2011 financial statement where the line item appears,and then fill in the correct dollar amount:

Accepted Answer

The answer of Jill,Inc.earned $950,000 on account during 2011.Customers owed...

Question 3

The FASB requires that a company using the direct method must provide a reconciliation between net income and cash from operating activities.

Accepted Answer

A) True 
 B)False

Question 4

Jo Lynn Lee is learning about investing.She has learned that Warren Buffet uses free cash flow as one of the tools to analyze companies.Explain to Jo Lynn why Warren Buffet and other investors believe that free cash flow is a valuable tool to use when analyzing companies.

Accepted Answer

Free cash flow is calculated by taking c

Question 5

Team Shirts,Inc.recognized $4,690 of insurance expense for the year.At the beginning of the year,the balance in Prepaid insurance was $400.At the end of the year,the balance was $775.How is the accounting information for these items reported on the statement of cash flows using the INDIRECT method?

Accepted Answer

The net increase in Prepaid insurance of

Question 6

For each section of the statement of cash flows shown below,indicate a healthy company that has ample cash to buy long-term assets as well as pay off its loans to the bank.Use a plus for net cash inflow and minus for net cash outflow:

Accepted Answer

The answer of For each section of the statement of...

Question 7

Delgado,Inc.wants to apply for a bank loan.It has put together a cash budget,an income statement and a balance sheet.However,the bank wants it to present a statement of cash flows in addition to the cash budget.Explain the differences between the cash budget and statement of cash flows.

Accepted Answer

A cash budget is an internal report for

Question 8

Regardless of whether the statement of cash flows was prepared using the direct method or the indirect method,Cash collected from customers is reported as a line item under operating activities.

Accepted Answer

A) True 
 B)False

Question 9

If a company uses the indirect method of calculating cash from operating activities,net income is adjusted for non-cash transactions.

Accepted Answer

A) True 
 B)False

Question 10

Cash collections from customers is a(n)________ activity on the statement of cash flows.

Accepted Answer

A) operating 
B) investing 
C) financing 
D) indirect 
A) operating 
B) investing 
C) financing 
D) indirect

Question 11

In applying the indirect method,depreciation expense is ________.

Accepted Answer

A) added to net income because it does not require a payment of cash 
B) subtracted from net income because it is a non-cash expense 
C) subtracted from cash from operating activities because it is a non-cash expense 
D) not shown on the statement of cash flows prepared using the indirect method 
A) added to net income because it does not require a payment of cash 
B) subtracted from net income because it is a non-cash expense 
C) subtracted from cash from operating activities because it is a non-cash expense 
D) not shown on the statement of cash flows prepared using the indirect method

Question 12

The following information is from Ads,Inc.'s December 31,2011 annual report:   Cash collected from customers on Ads,Inc.'s statement of cash flows equals ________.

Accepted Answer

A) $250,000 
B) $220,000 
C) $255,000 
D) $245,000 
A) $250,000 
B) $220,000 
C) $255,000 
D) $245,000

Question 13

The statement of cash flows explains the details of the change in the cash balance during an accounting period.

Accepted Answer

A) True 
 B)False

Question 14

A company that uses the direct method will show more cash from operating activities than a company that uses the indirect method.

Accepted Answer

A) True 
 B)False

Question 15

payment of interest expense

Accepted Answer

A) operating activities 
B) investing activities 
C) financing activities 
D) noncash item 
A) operating activities 
B) investing activities 
C) financing activities 
D) noncash item

Question 16

A cash budget is a detailed plan of a company's estimated cash receipts and estimated cash disbursements.

Accepted Answer

A) True 
 B)False

Question 17

Cash paid for interest is an operating activity.

Accepted Answer

A) True 
 B)False

Question 18

Team Shirts,Inc.paid $1,050 worth of interest to a Swiss bank.How is this amount reported on the statement of cash flows?

Accepted Answer

The $1,050 would be reported a

Question 19

The income statement for Lilly's,Inc.for the year ended June 30,2011 showed sales of $50,000.During the year,the balance in accounts receivable increased by $7,500.Cash collected from customers equals 1.$________ and is 2.a(n)________ activity.

Accepted Answer

1.$42,500,

Question 20

Cash budgets allow companies to plan for any cash shortage by ________.

Accepted Answer

A) securing a line of credit from a local bank 
B) borrowing money 
C) altering the timing of receipts or disbursements 
D) all of these 
A) securing a line of credit from a local bank 
B) borrowing money 
C) altering the timing of receipts or disbursements 
D) all of these

The cash flows reported in the financing activities section reveal information about a company's plans for the future.

Jill,Inc.earned $950,000 on account during 2011.Customers owed Jill,Inc.$40,000 at December 31,2010 and $50,000 at December 31,2011.For each item,first select the column of the 2011 financial statement where the line item appears,and then fill in the correct dollar amount:

The FASB requires that a company using the direct method must provide a reconciliation between net income and cash from operating activities.

Jo Lynn Lee is learning about investing.She has learned that Warren Buffet uses free cash flow as one of the tools to analyze companies.Explain to Jo Lynn why Warren Buffet and other investors believe that free cash flow is a valuable tool to use when analyzing companies.

Team Shirts,Inc.recognized $4,690 of insurance expense for the year.At the beginning of the year,the balance in Prepaid insurance was $400.At the end of the year,the balance was $775.How is the accounting information for these items reported on the statement of cash flows using the INDIRECT method?

For each section of the statement of cash flows shown below,indicate a healthy company that has ample cash to buy long-term assets as well as pay off its loans to the bank.Use a plus for net cash inflow and minus for net cash outflow:

Delgado,Inc.wants to apply for a bank loan.It has put together a cash budget,an income statement and a balance sheet.However,the bank wants it to present a statement of cash flows in addition to the cash budget.Explain the differences between the cash budget and statement of cash flows.

Regardless of whether the statement of cash flows was prepared using the direct method or the indirect method,Cash collected from customers is reported as a line item under operating activities.

If a company uses the indirect method of calculating cash from operating activities,net income is adjusted for non-cash transactions.

Cash collections from customers is a(n)________ activity on the statement of cash flows.

In applying the indirect method,depreciation expense is ________.

The following information is from Ads,Inc.'s December 31,2011 annual report: Cash collected from customers on Ads,Inc.'s statement of cash flows equals ________.

The statement of cash flows explains the details of the change in the cash balance during an accounting period.

A company that uses the direct method will show more cash from operating activities than a company that uses the indirect method.

payment of interest expense

A cash budget is a detailed plan of a company's estimated cash receipts and estimated cash disbursements.

Cash paid for interest is an operating activity.

Team Shirts,Inc.paid $1,050 worth of interest to a Swiss bank.How is this amount reported on the statement of cash flows?

The income statement for Lilly's,Inc.for the year ended June 30,2011 showed sales of $50,000.During the year,the balance in accounts receivable increased by $7,500.Cash collected from customers equals 1.$ and is 2.a(n) activity.

Cash budgets allow companies to plan for any cash shortage by ________.

Business: Whats It All About

Qualities of Accounting Information

Accruals and Deferrals: Timing Is Everything in Accounting

Payment for Goods and Services: Cash and Accounts Receivable

The Purchase and Sale of Inventory

Acquisition and Use of Long-Term Assets

Accounting for Liabilities

Accounting for Shareholders Equity

Using Financial Statement Analysis to Evaluate Firm Performance

Quality of Earnings, corporate Governance, and Ifrs

Filters

Exam 9: Preparing and Analyzing the Statement of Cash Flows

The cash flows reported in the financing activities section reveal information about a company's plans for the future.

Jill,Inc.earned $950,000 on account during 2011.Customers owed Jill,Inc.$40,000 at December 31,2010 and $50,000 at December 31,2011.For each item,first select the column of the 2011 financial statement where the line item appears,and then fill in the correct dollar amount:

The FASB requires that a company using the direct method must provide a reconciliation between net income and cash from operating activities.

Jo Lynn Lee is learning about investing.She has learned that Warren Buffet uses free cash flow as one of the tools to analyze companies.Explain to Jo Lynn why Warren Buffet and other investors believe that free cash flow is a valuable tool to use when analyzing companies.

Team Shirts,Inc.recognized $4,690 of insurance expense for the year.At the beginning of the year,the balance in Prepaid insurance was $400.At the end of the year,the balance was $775.How is the accounting information for these items reported on the statement of cash flows using the INDIRECT method?

For each section of the statement of cash flows shown below,indicate a healthy company that has ample cash to buy long-term assets as well as pay off its loans to the bank.Use a plus for net cash inflow and minus for net cash outflow:

Delgado,Inc.wants to apply for a bank loan.It has put together a cash budget,an income statement and a balance sheet.However,the bank wants it to present a statement of cash flows in addition to the cash budget.Explain the differences between the cash budget and statement of cash flows.

Regardless of whether the statement of cash flows was prepared using the direct method or the indirect method,Cash collected from customers is reported as a line item under operating activities.

If a company uses the indirect method of calculating cash from operating activities,net income is adjusted for non-cash transactions.

Cash collections from customers is a(n)________ activity on the statement of cash flows.

In applying the indirect method,depreciation expense is ________.

The following information is from Ads,Inc.'s December 31,2011 annual report: Cash collected from customers on Ads,Inc.'s statement of cash flows equals ________.

The statement of cash flows explains the details of the change in the cash balance during an accounting period.

A company that uses the direct method will show more cash from operating activities than a company that uses the indirect method.

payment of interest expense

A cash budget is a detailed plan of a company's estimated cash receipts and estimated cash disbursements.

Cash paid for interest is an operating activity.

Team Shirts,Inc.paid $1,050 worth of interest to a Swiss bank.How is this amount reported on the statement of cash flows?

The income statement for Lilly's,Inc.for the year ended June 30,2011 showed sales of $50,000.During the year,the balance in accounts receivable increased by $7,500.Cash collected from customers equals 1.$________ and is 2.a(n)________ activity.

Cash budgets allow companies to plan for any cash shortage by ________.

Business: Whats It All About

Qualities of Accounting Information

Accruals and Deferrals: Timing Is Everything in Accounting

Payment for Goods and Services: Cash and Accounts Receivable

The Purchase and Sale of Inventory

Acquisition and Use of Long-Term Assets

Accounting for Liabilities

Accounting for Shareholders Equity

Using Financial Statement Analysis to Evaluate Firm Performance

Quality of Earnings, corporate Governance, and Ifrs

Filters

The income statement for Lilly's,Inc.for the year ended June 30,2011 showed sales of $50,000.During the year,the balance in accounts receivable increased by $7,500.Cash collected from customers equals 1.$ and is 2.a(n) activity.