Question 1

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

Accepted Answer

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

Question 2

Explain the use of a spreadsheet in the preparation of the statement of cash flows.

Accepted Answer

The spreadsheet provides an analytical f

Question 3

The payment of cash dividends never changes the balance of retained earnings.

Accepted Answer

A) True 
 B)False

Question 4

Companies have the option of using either the direct or indirect method to prepare the operating section of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 5

A purchase of land in exchange for shares of stock is disclosed on the statement of cash flows or in a note to the statement.

Accepted Answer

A) True 
 B)False

Question 6

A company's transactions with its creditors to borrow money and/or to repay the principal amounts of loans are reported as cash flows from:

Accepted Answer

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

Question 7

Define and discuss the differences between operating,investing and financing activities.

Accepted Answer

Operating activities involve the day-to-

Question 8

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

Accepted Answer

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

Question 9

The payment of cash dividends to shareholders is classified as a financing activity.

Accepted Answer

A) True 
 B)False

Question 10

The cash flow on total assets ratio is defined as the total cash flows from operations divided by the average total assets.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following transactions or events should be reported as a source of cash from operating activities when using the direct method?

Accepted Answer

A) Credit sales 
B) Cash collections from customers 
C) Depreciation expense 
D) Cash received from the sale of a building 
E) Cash received from the sale of treasury stock 
A) Credit sales 
B) Cash collections from customers 
C) Depreciation expense 
D) Cash received from the sale of a building 
E) Cash received from the sale of treasury stock

Question 12

On a spreadsheet used to prepare the operating section of the statement of cash flows,depreciation expense does not require an entry in the Analysis of Changes column as it is a noncash item.

Accepted Answer

A) True 
 B)False

Question 13

A statement of cash flows should reconcile the differences between the beginning and ending balances of:

Accepted Answer

A) Net income 
B) Equity 
C) Cash and cash equivalents 
D) Working capital 
E) Cash,cash equivalents and short-term investments 
A) Net income 
B) Equity 
C) Cash and cash equivalents 
D) Working capital 
E) Cash,cash equivalents and short-term investments

Question 14

When preparing the operating 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 15

A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash.The amount that should be reported as a source of cash under cash flows from investing activities is:

Accepted Answer

A) $50,000 
B) $5,000 
C) $45,000 
D) Zero.This is an operating activity 
E) Zero.This is a financing activity 
A) $50,000 
B) $5,000 
C) $45,000 
D) Zero.This is an operating activity 
E) Zero.This is a financing activity

Question 16

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.
$\begin{array}{|l|r|}
\hline \text { Cost of good sold } & \$ 536,000 \
\hline \text { Merchandise inventory, January 1 } & 64,800 \
\hline \text { Merchandise inventory, December 31 } & 57,000 \
\hline \text { Accounts payable, January 1 } & 64,400 \
\hline \text { Accounts payable, December 31 } & 59,000\
\hline 
\end{array}$

Accepted Answer

A) $522,800 
B) $533,600 
C) $528,200 
D) $536,000 
E) $543,800 
A) $522,800 
B) $533,600 
C) $528,200 
D) $536,000 
E) $543,800

Question 17

The statement of cash flows reports the total change in cash in the period.

Accepted Answer

A) True 
 B)False

Question 18

If a company borrows money from a bank,the interest paid on this loan should be reported on the statement of cash flows as a(n):

Accepted Answer

A) Operating activity 
B) Investing activity 
C) Financing activity 
D) Noncash investing and financing activity 
E) None of these.This is not reported in the statement of cash flows 
A) Operating activity 
B) Investing activity 
C) Financing activity 
D) Noncash investing and financing activity 
E) None of these.This is not reported in the statement of cash flows

Question 19

Cash paid out for merchandise is considered to be an operating activity.

Accepted Answer

A) True 
 B)False

Question 20

Define the cash flow on total assets ratio and explain how it is used to evaluate cash flows and to assess company performance.

Accepted Answer

The cash flow on total assets ratio is d

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

Explain the use of a spreadsheet in the preparation of the statement of cash flows.

The payment of cash dividends never changes the balance of retained earnings.

Companies have the option of using either the direct or indirect method to prepare the operating section of the statement of cash flows.

A purchase of land in exchange for shares of stock is disclosed on the statement of cash flows or in a note to the statement.

A company's transactions with its creditors to borrow money and/or to repay the principal amounts of loans are reported as cash flows from:

Define and discuss the differences between operating,investing and financing activities.

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

The payment of cash dividends to shareholders is classified as a financing activity.

The cash flow on total assets ratio is defined as the total cash flows from operations divided by the average total assets.

Which of the following transactions or events should be reported as a source of cash from operating activities when using the direct method?

On a spreadsheet used to prepare the operating section of the statement of cash flows,depreciation expense does not require an entry in the Analysis of Changes column as it is a noncash item.

A statement of cash flows should reconcile the differences between the beginning and ending balances of:

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

A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash.The amount that should be reported as a source of cash under cash flows from investing activities is:

The statement of cash flows reports the total change in cash in the period.

If a company borrows money from a bank,the interest paid on this loan should be reported on the statement of cash flows as a(n):

Cash paid out for merchandise is considered to be an operating activity.

Define the cash flow on total assets ratio and explain how it is used to evaluate cash flows and to assess company performance.

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Analyzing and Interpreting Financial Statements

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

Filters

Exam 12: Reporting and Analyzing Cash Flows

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

Explain the use of a spreadsheet in the preparation of the statement of cash flows.

The payment of cash dividends never changes the balance of retained earnings.

Companies have the option of using either the direct or indirect method to prepare the operating section of the statement of cash flows.

A purchase of land in exchange for shares of stock is disclosed on the statement of cash flows or in a note to the statement.

A company's transactions with its creditors to borrow money and/or to repay the principal amounts of loans are reported as cash flows from:

Define and discuss the differences between operating,investing and financing activities.

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

The payment of cash dividends to shareholders is classified as a financing activity.

The cash flow on total assets ratio is defined as the total cash flows from operations divided by the average total assets.

Which of the following transactions or events should be reported as a source of cash from operating activities when using the direct method?

On a spreadsheet used to prepare the operating section of the statement of cash flows,depreciation expense does not require an entry in the Analysis of Changes column as it is a noncash item.

A statement of cash flows should reconcile the differences between the beginning and ending balances of:

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

A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash.The amount that should be reported as a source of cash under cash flows from investing activities is:

The statement of cash flows reports the total change in cash in the period.

If a company borrows money from a bank,the interest paid on this loan should be reported on the statement of cash flows as a(n):

Cash paid out for merchandise is considered to be an operating activity.

Define the cash flow on total assets ratio and explain how it is used to evaluate cash flows and to assess company performance.

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Analyzing and Interpreting Financial Statements

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

Filters