Question 1

Cash payments from financing activities include:

Accepted Answer

A)  issuing stock for property. 
B)  sale of treasury stock. 
C)  payment of notes payable. 
D)  purchase of plant assets. 
A)  issuing stock for property. 
B)  sale of treasury stock. 
C)  payment of notes payable. 
D)  purchase of plant assets. C

Question 2

Most of the time, net income will be the same as cash flows from operating activities.

Accepted Answer

A) True 
 B)False  False

Question 3

Under the direct method of preparing the financing section of the statement of cash flows, net cash provided by financing activities is $388,000. If the indirect method of preparing the financing section of the statement of cash flows was used:

Accepted Answer

A)  cash provided by financing activities would be less than $388,000. 
B)  cash provided by financing activities would be more than $388,000. 
C)  cash provided by financing activities would be the same, $388,000. 
D)  cash provided by operating activities would equal $388,000. 
A)  cash provided by financing activities would be less than $388,000. 
B)  cash provided by financing activities would be more than $388,000. 
C)  cash provided by financing activities would be the same, $388,000. 
D)  cash provided by operating activities would equal $388,000. C

Question 4

Using the indirect method of statement of cash flows, which of the following would be added to net income?

Accepted Answer

A)  Depletion expense 
B)  An increase in accounts receivable 
C)  A decrease in accounts payable 
D)  A gain on the sale of property 
A)  Depletion expense 
B)  An increase in accounts receivable 
C)  A decrease in accounts payable 
D)  A gain on the sale of property

Question 5

The statement of cash flows will NOT report:

Accepted Answer

A)  the number of checks not written at the end of the period. 
B)  how cash was used in the current period. 
C)  changes in the cash balance for the current period. 
D)  the sources of cash in the current period. 
A)  the number of checks not written at the end of the period. 
B)  how cash was used in the current period. 
C)  changes in the cash balance for the current period. 
D)  the sources of cash in the current period.

Question 6

A statement of cash flows accomplishes all of the following EXCEPT:

Accepted Answer

A)  determines the ability of the company to pay dividends and interest. 
B)  provides information about the cash receipts and cash payments during a period. 
C)  determines whether revenues equal expenses. 
D)  predicts future cash flows. 
A)  determines the ability of the company to pay dividends and interest. 
B)  provides information about the cash receipts and cash payments during a period. 
C)  determines whether revenues equal expenses. 
D)  predicts future cash flows.

Question 7

Salem Corporations income statement showed cost of goods sold of $115,000 and operating expenses of $20,000. The inventory account decreased $7,000, accounts payable increased $5,000, prepaid expenses increased $3,000, and accrued expenses payable decreased $2,000.
Calculate the following using the direct method:
1. Cash payments for operating expenses
2. Cash payments to suppliers

Accepted Answer

1. Cash payments for operating

Question 8

A gain on sale of equipment is subtracted from net income when determining cash provided by operations under the indirect method.

Accepted Answer

A) True 
 B)False

Question 9

An increase in Interest Payable during the reporting period indicates that cash paid for interest exceeded Interest Expense on the income statement.

Accepted Answer

A) True 
 B)False

Question 10

If a company has high net income, it may still have difficulty paying its bills.

Accepted Answer

A) True 
 B)False

Question 11

In preparing a statement of cash flows, converting bonds into common stock would be reported in:

Accepted Answer

A)  the operating activities section. 
B)  the investing activities section. 
C)  the financing activities section. 
D)  a separate schedule or note to the financial statements. 
A)  the operating activities section. 
B)  the investing activities section. 
C)  the financing activities section. 
D)  a separate schedule or note to the financial statements.

Question 12

The statement of cash flows is an optional statement that can be prepared along with the income statement, balance sheet, and statement of retained earnings.

Accepted Answer

A) True 
 B)False

Question 13

Cash flow from financing activities is the most important category on the statement of cash flows because it is considered the best way to evaluate future income.

Accepted Answer

A) True 
 B)False

Question 14

In 2012, Simply Simple, Inc. sold land for $150,000 cash, purchased equipment for $30,000 cash and issued bonds for $100,000 cash. The net cash provided by investing activities is:

Accepted Answer

A)  $280,000. 
B)  $220,000. 
C)  $120,000. 
D)  $20,000. 
A)  $280,000. 
B)  $220,000. 
C)  $120,000. 
D)  $20,000.

Question 15

The change in total assets is the "check figure" for the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 16

When preparing a statement of cash flows, cash equivalents are subtracted from cash in order to calculate the net change in cash during a period.

Accepted Answer

A) True 
 B)False

Question 17

Under the indirect method, depletion expense must be subtracted from net income under the operating activities.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following would NOT appear in the operating activities section of a statement of cash flows using the direct method?

Accepted Answer

A)  Cash paid for income taxes 
B)  Interest received on notes receivable 
C)  Gain on sale of equipment 
D)  Payments to suppliers 
A)  Cash paid for income taxes 
B)  Interest received on notes receivable 
C)  Gain on sale of equipment 
D)  Payments to suppliers

Question 19

Collections on a loan are reported as investing activities on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 20

Activities that affect long-term assets are:

Accepted Answer

A)  operating activities. 
B)  investing activities. 
C)  financing activities. 
D)  noncash investing and financing activities. 
A)  operating activities. 
B)  investing activities. 
C)  financing activities. 
D)  noncash investing and financing activities.

Cash payments from financing activities include:

Most of the time, net income will be the same as cash flows from operating activities.

Under the direct method of preparing the financing section of the statement of cash flows, net cash provided by financing activities is $388,000. If the indirect method of preparing the financing section of the statement of cash flows was used:

Using the indirect method of statement of cash flows, which of the following would be added to net income?

The statement of cash flows will NOT report:

A statement of cash flows accomplishes all of the following EXCEPT:

A gain on sale of equipment is subtracted from net income when determining cash provided by operations under the indirect method.

An increase in Interest Payable during the reporting period indicates that cash paid for interest exceeded Interest Expense on the income statement.

If a company has high net income, it may still have difficulty paying its bills.

In preparing a statement of cash flows, converting bonds into common stock would be reported in:

The statement of cash flows is an optional statement that can be prepared along with the income statement, balance sheet, and statement of retained earnings.

Cash flow from financing activities is the most important category on the statement of cash flows because it is considered the best way to evaluate future income.

In 2012, Simply Simple, Inc. sold land for $150,000 cash, purchased equipment for $30,000 cash and issued bonds for $100,000 cash. The net cash provided by investing activities is:

The change in total assets is the "check figure" for the statement of cash flows.

When preparing a statement of cash flows, cash equivalents are subtracted from cash in order to calculate the net change in cash during a period.

Under the indirect method, depletion expense must be subtracted from net income under the operating activities.

Which of the following would NOT appear in the operating activities section of a statement of cash flows using the direct method?

Collections on a loan are reported as investing activities on the statement of cash flows.

Activities that affect long-term assets are:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Short-Term Investments Receivables

Inventory Cost of Goods Sold

Plant Assets, Natural Resources, Intangibles

Long-Term Investments the Time Value of Money

Liabilities

Stockholders Equity

The Income Statement, the Statement of Comprehensive Income, the Statement of Stockholders Equity

Financial Statement Analysis

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Exam 12: The Statement of Cash Flows

Cash payments from financing activities include:

Most of the time, net income will be the same as cash flows from operating activities.

Under the direct method of preparing the financing section of the statement of cash flows, net cash provided by financing activities is $388,000. If the indirect method of preparing the financing section of the statement of cash flows was used:

Using the indirect method of statement of cash flows, which of the following would be added to net income?

The statement of cash flows will NOT report:

A statement of cash flows accomplishes all of the following EXCEPT:

A gain on sale of equipment is subtracted from net income when determining cash provided by operations under the indirect method.

An increase in Interest Payable during the reporting period indicates that cash paid for interest exceeded Interest Expense on the income statement.

If a company has high net income, it may still have difficulty paying its bills.

In preparing a statement of cash flows, converting bonds into common stock would be reported in:

The statement of cash flows is an optional statement that can be prepared along with the income statement, balance sheet, and statement of retained earnings.

Cash flow from financing activities is the most important category on the statement of cash flows because it is considered the best way to evaluate future income.

In 2012, Simply Simple, Inc. sold land for $150,000 cash, purchased equipment for $30,000 cash and issued bonds for $100,000 cash. The net cash provided by investing activities is:

The change in total assets is the "check figure" for the statement of cash flows.

When preparing a statement of cash flows, cash equivalents are subtracted from cash in order to calculate the net change in cash during a period.

Under the indirect method, depletion expense must be subtracted from net income under the operating activities.

Which of the following would NOT appear in the operating activities section of a statement of cash flows using the direct method?

Collections on a loan are reported as investing activities on the statement of cash flows.

Activities that affect long-term assets are:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Short-Term Investments Receivables

Inventory Cost of Goods Sold

Plant Assets, Natural Resources, Intangibles

Long-Term Investments the Time Value of Money

Liabilities

Stockholders Equity

The Income Statement, the Statement of Comprehensive Income, the Statement of Stockholders Equity

Financial Statement Analysis

Filters