Question 1

Which of the following is not true regarding the fair value option for marketable securities and derivatives?

Accepted Answer

A) Subsequent to the acquisition of a derivative, the firm may report changes in fair value of derivatives in Other Comprehensive Income. 
B) Subsequent to the acquisition of a derivative, the firm may report changes in fair value of derivatives, but they have no effect on any lines of the statement of cash flows. 
C) Firms using the fair value option mark the carrying value of the asset to fair value each period. 
D) If the change in fair value increases carrying value, then the firm reports a gain in income equal to the amount of the increase in carrying value during the current period. 
E) The cash flow from operations section shows an addition for the amount of the gain equal to the amount of the increase in carrying value of a derivative during the current period. 
A) Subsequent to the acquisition of a derivative, the firm may report changes in fair value of derivatives in Other Comprehensive Income. 
B) Subsequent to the acquisition of a derivative, the firm may report changes in fair value of derivatives, but they have no effect on any lines of the statement of cash flows. 
C) Firms using the fair value option mark the carrying value of the asset to fair value each period. 
D) If the change in fair value increases carrying value, then the firm reports a gain in income equal to the amount of the increase in carrying value during the current period. 
E) The cash flow from operations section shows an addition for the amount of the gain equal to the amount of the increase in carrying value of a derivative during the current period.

Question 2

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. 
E) None of these answers is correct. 
A) decrease in accounts payable. 
B) increase in accounts payable. 
C) decrease in accounts receivable. 
D) increase in accounts receivable. 
E) None of these answers is correct.

Question 3

Revenues from sales of goods or services to customers during a period equal cash received from customers during that period.

Accepted Answer

A) True 
 B)False

Question 4

Dmitri Company reported the following changes in the balance sheet accounts between Year 1 and Year 2.
   Assume that there were no sales of equipment and that no dividends were declared or paid.

Required:

Given the changes in the balance sheet for Year 2, state:
a.	whether the change in each account indicates that an addition or subtraction needs to be made to determine cash flow, and
b.	in what section of the statement of cash flows the adjustment would appear. Indicate if no adjustment is necessary.

Accepted Answer

The answer of Dmitri Company reported the following changes in...

Question 5

The accountant prepares the statement of cash flows after completing the

Accepted Answer

A) balance sheet, only. 
B) income statement, only 
C) balance sheet and the income statement. 
D) funds flow statement. 
E) statement of retained earnings. 
A) balance sheet, only. 
B) income statement, only 
C) balance sheet and the income statement. 
D) funds flow statement. 
E) statement of retained earnings.

Question 6

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 
E) None of these answers is correct. 
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 
E) None of these answers is correct.

Which of the following is not true regarding the fair value option for marketable securities and derivatives?

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

Revenues from sales of goods or services to customers during a period equal cash received from customers during that period.

The accountant prepares the statement of cash flows after completing the

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?

Introduction to Business Activities and Overview of Financial Statements and the Reporting Process

The Basics of Record Keeping and Financial Statement Preparation: Balance Sheet

The Basics of Record Keeping and Financial Statement Preparation: Income Statement

Balance Sheet: Presenting and Analyzing Resources and Financing

Income Statement: Reporting Results of Operating Activities

Statement of Cash Flows

Introduction to Financial Statement Analysis

Revenue Recognition, Receivables, and Advances From Customers

Working Capital

Long-Lived Tangible and Intangible Assets

Notes, Bonds, and Leases

Liabilities: Off-Balance Sheet Financing, Retirement Benefits, and Income Taxes

Marketable Securities and Derivatives

Intercorporate Investments in Common Stock

Shareholders Equity: Capital Contributions and Distributions

Synthesis and Extensions

Filters

Exam 16: Statement of Cash Flows: Another Look

Which of the following is not true regarding the fair value option for marketable securities and derivatives?

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

Revenues from sales of goods or services to customers during a period equal cash received from customers during that period.

The accountant prepares the statement of cash flows after completing the

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?

Introduction to Business Activities and Overview of Financial Statements and the Reporting Process

The Basics of Record Keeping and Financial Statement Preparation: Balance Sheet

The Basics of Record Keeping and Financial Statement Preparation: Income Statement

Balance Sheet: Presenting and Analyzing Resources and Financing

Income Statement: Reporting Results of Operating Activities

Statement of Cash Flows

Introduction to Financial Statement Analysis

Revenue Recognition, Receivables, and Advances From Customers

Working Capital

Long-Lived Tangible and Intangible Assets

Notes, Bonds, and Leases

Liabilities: Off-Balance Sheet Financing, Retirement Benefits, and Income Taxes

Marketable Securities and Derivatives

Intercorporate Investments in Common Stock

Shareholders Equity: Capital Contributions and Distributions

Synthesis and Extensions

Filters