Question 1

Use the cash flow on total assets ratio to determine which of these three companies is most efficiently using its assets.

Accepted Answer

A) Company A 
B) Company B 
C) Company C 
D) As all the companies have the same cash from operations,they are all equally efficient in the use of their assets 
E) Cannot be determined from the given information 
A) Company A 
B) Company B 
C) Company C 
D) As all the companies have the same cash from operations,they are all equally efficient in the use of their assets 
E) Cannot be determined from the given information

Question 2

An investment that is readily convertible to a known amount of cash and that is sufficiently close to its maturity date so that its market value is relatively insensitive to interest rate changes is a(n):

Accepted Answer

A) Short-term marketable equity security 
B) Operating activity 
C) Common stock 
D) Cash equivalent 
E) Financing activity 
A) Short-term marketable equity security 
B) Operating activity 
C) Common stock 
D) Cash equivalent 
E) Financing activity

Question 3

Which of the following items is reported on the statement of cash flows under financing activities?

Accepted Answer

A) Declaration of a cash dividend 
B) Payment of a cash dividend 
C) Declaration of a stock dividend 
D) Payment of a stock dividend 
E) Stock split 
A) Declaration of a cash dividend 
B) Payment of a cash dividend 
C) Declaration of a stock dividend 
D) Payment of a stock dividend 
E) Stock split

Question 4

To be classified as a cash equivalent,an investment must be readily convertible to an unknown amount of cash,because the market value may be affected by interest rate changes.

Accepted Answer

A) True 
 B)False

Question 5

Spirit Company,a merchandiser,recently completed its 2010 calendar year.For the year, (1)all sales are credit sales, (2)all credits to Accounts Receivable reflect cash receipts from customers, (3)all purchases of inventory are on credit, (4)all debits to Accounts Payable reflect cash payments for inventory,and (5)Other Expenses are paid in advance and are initially debited to Prepaid Expenses.The company's balance sheet and income statement follow:

Additional Information on Year 2010 Transactions
a. The loss on the cash sale of equipment was $ \$ 5,875 $ (details in $ b $ ).
b. Sold equipment costing $ \$ 46,500 $, for a loss of $ \$ 5,875 $.
c. Purchased equipment costing $ \$ 99,000 $ by paying $ \$ 35,000 $ cash and signing a long-term note payable for the balance.
d. Borrowed $ \$ 2,000 $ cash by signing a short-term note payable.
e. Paid $ \$ 47,500 $ cash to reduce the long-term notes payable.
f. Issued 2,400 shares of common stock for $ \$ 20 $ cash per share.
g. Net income and dividends were the only items that affected retained earnings.

What is the net cash flows provided (used)by operating activities using the indirect method?

Accepted Answer

A) ($53,175) 
B) $47,300 
C) $53,175 
D) ($47,300) 
E) $128,635 
A) ($53,175) 
B) $47,300 
C) $53,175 
D) ($47,300) 
E) $128,635

Question 6

Polaroid reported net cash provided by operating activities of $131.4 million.Assets at the beginning of the year totaled $2,197.7 million and totaled $2,040.0 million at the end of the year.Calculate Polaroid's cash flow on total assets ratio.

Accepted Answer

$131.4/[($

Question 7

Match between columns
                        Premises:  Sold equipment for cash
 Received interest from investments in trading securities
 Received cash dividends from investments in trading securities
 Collected accounts receivable from customers
 Purchases of land for cash
 Purchased land in exchange for a note payable
 Issued bonds payable for cash
 Issued stock for cash
 Paid cash dividends
 Paid wages to employees

Accepted Answer

The Answer of (O) operating activity and (I) investing activity is...

Question 8

The purchase of stock in another company is considered to be a financing activity.

Accepted Answer

A) True 
 B)False

Question 9

A company had net cash flows from operations of $120,000,total cash flows of $500,000 and average total assets of $2,500,000.The cash flow on total assets ratio equals:

Accepted Answer

A) 4.8% 
B) 5.0% 
C) 20.0% 
D) 20.8% 
E) 24.0% 
A) 4.8% 
B) 5.0% 
C) 20.0% 
D) 20.8% 
E) 24.0%

Question 10

The usual first step in preparing the statement of cash flows is computing the net increase or net decrease in cash.

Accepted Answer

A) True 
 B)False

Question 11

Use the following company information to calculate its net cash provided or used by investing activities:
(a)Equipment with a book value of $125,000 and an original cost of $220,000 was sold at a gain of $22,000.
(b)Paid $49,000 cash for a new truck.
(c)Sold land costing $30,000 for $26,000 cash,realizing a $4,000 loss.
(d)Purchased treasury stock for $53,000 cash.
(e)Long-term investments in stock are sold for $41,000 cash,realizing a gain of $3,500.

Accepted Answer

None

Question 12

A company reported average total assets of $496,000 in 2009 and $604,000 in 2010.Its net operating cash flow in 2009 was $41,150 and $55,500 in 2010.Calculate its cash flow on total assets ratio for both years.Comment on the results.

Accepted Answer

\[\begin{array} { | l | l | l | } 
\hlin

Question 13

The appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is:

Accepted Answer

A) Operating activities 
B) Financing activities 
C) Investing activities 
D) Schedule of noncash investing or financing activity 
E) None of these as this is not reported on the statement of cash flows 
A) Operating activities 
B) Financing activities 
C) Investing activities 
D) Schedule of noncash investing or financing activity 
E) None of these as this is not reported on the statement of cash flows

Question 14

Noncash financing and investing activities are disclosed in the ____________ or in a separate ______________________________.

Accepted Answer

Notes; schedule incl

Question 15

Kodak reported assets of $13,362 million at January 1 and $13,369 million as of December 31 of the current year.Kodak's net cash flows from operations was $2,204 million.Calculate Kodak's cash flow on total assets ratio.

Accepted Answer

$2,204/[($

Question 16

The indirect method reports individual operating cash outflows and cash inflows by activity.

Accepted Answer

A) True 
 B)False

Question 17

The accounting records of Miller Company provided the data below ($ in 000s).
$\begin{array}{lr}
\text { Net income } & \$ 17,500 \
 \text { Depreciation expense } & 8,400 \
 \text { Increase in accounts receivable } & 4,400 \
 \text { Decrease in inventory } & 6,400 \
 \text { Decrease in prepaid insurance } & 1,500 \
 \text { Decrease in salaries payable } & 2,700 \
 \text { Increase in interest payable } & 900
\end{array}$
What is the net cash provided (used)by operating activities?

Accepted Answer

A) $20,600 
B) $27,600 
C) $3,800 
D) ($27,600) 
E) $41,800 
A) $20,600 
B) $27,600 
C) $3,800 
D) ($27,600) 
E) $41,800

Question 18

Define and explain significant noncash investing and financing activities and the method of reporting them on the statement of cash flows.

Accepted Answer

Noncash investing and financing activiti

Question 19

Business activities that either generate or use cash are classified as operating,investing or financing activities on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 20

For each of the following items,indicate whether it would be classified as an (O)operating activity,an (I)investing activity,a (F)financing activity or a significant, (N)noncash financing and investing activity.

Accepted Answer

The answer of For each of the following items,indicate whether...

Use the cash flow on total assets ratio to determine which of these three companies is most efficiently using its assets.

An investment that is readily convertible to a known amount of cash and that is sufficiently close to its maturity date so that its market value is relatively insensitive to interest rate changes is a(n):

Which of the following items is reported on the statement of cash flows under financing activities?

To be classified as a cash equivalent,an investment must be readily convertible to an unknown amount of cash,because the market value may be affected by interest rate changes.

Polaroid reported net cash provided by operating activities of $131.4 million.Assets at the beginning of the year totaled $2,197.7 million and totaled $2,040.0 million at the end of the year.Calculate Polaroid's cash flow on total assets ratio.

The purchase of stock in another company is considered to be a financing activity.

A company had net cash flows from operations of $120,000,total cash flows of $500,000 and average total assets of $2,500,000.The cash flow on total assets ratio equals:

The usual first step in preparing the statement of cash flows is computing the net increase or net decrease in cash.

A company reported average total assets of $496,000 in 2009 and $604,000 in 2010.Its net operating cash flow in 2009 was $41,150 and $55,500 in 2010.Calculate its cash flow on total assets ratio for both years.Comment on the results.

The appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is:

Noncash financing and investing activities are disclosed in the or in a separate __________________.

Kodak reported assets of $13,362 million at January 1 and $13,369 million as of December 31 of the current year.Kodak's net cash flows from operations was $2,204 million.Calculate Kodak's cash flow on total assets ratio.

The indirect method reports individual operating cash outflows and cash inflows by activity.

Define and explain significant noncash investing and financing activities and the method of reporting them on the statement of cash flows.

Business activities that either generate or use cash are classified as operating,investing or financing activities on the statement of cash flows.

For each of the following items,indicate whether it would be classified as an (O)operating activity,an (I)investing activity,a (F)financing activity or a significant, (N)noncash financing and investing activity.

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

Use the cash flow on total assets ratio to determine which of these three companies is most efficiently using its assets.

An investment that is readily convertible to a known amount of cash and that is sufficiently close to its maturity date so that its market value is relatively insensitive to interest rate changes is a(n):

Which of the following items is reported on the statement of cash flows under financing activities?

To be classified as a cash equivalent,an investment must be readily convertible to an unknown amount of cash,because the market value may be affected by interest rate changes.

Polaroid reported net cash provided by operating activities of $131.4 million.Assets at the beginning of the year totaled $2,197.7 million and totaled $2,040.0 million at the end of the year.Calculate Polaroid's cash flow on total assets ratio.

The purchase of stock in another company is considered to be a financing activity.

A company had net cash flows from operations of $120,000,total cash flows of $500,000 and average total assets of $2,500,000.The cash flow on total assets ratio equals:

The usual first step in preparing the statement of cash flows is computing the net increase or net decrease in cash.

A company reported average total assets of $496,000 in 2009 and $604,000 in 2010.Its net operating cash flow in 2009 was $41,150 and $55,500 in 2010.Calculate its cash flow on total assets ratio for both years.Comment on the results.

The appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is:

Noncash financing and investing activities are disclosed in the ____________ or in a separate ______________________________.

Kodak reported assets of $13,362 million at January 1 and $13,369 million as of December 31 of the current year.Kodak's net cash flows from operations was $2,204 million.Calculate Kodak's cash flow on total assets ratio.

The indirect method reports individual operating cash outflows and cash inflows by activity.

Define and explain significant noncash investing and financing activities and the method of reporting them on the statement of cash flows.

Business activities that either generate or use cash are classified as operating,investing or financing activities on the statement of cash flows.

For each of the following items,indicate whether it would be classified as an (O)operating activity,an (I)investing activity,a (F)financing activity or a significant, (N)noncash financing and investing activity.

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

Noncash financing and investing activities are disclosed in the or in a separate __________________.