Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

The use of a spreadsheet for analysis is especially useful when preparing the statement of cash flows using the _____________ method.

Accepted Answer

The answer of The use of a spreadsheet for analysis...

Question 3

The statement of cash flows explains the difference between the beginning and ending balances of cash and cash equivalents.

Accepted Answer

A) True 
 B)False

Question 4

_____________ activities include the cash effects of transactions and events that determine net income.

Accepted Answer

The answer of _____________ activities include the cash effects of...

Question 5

Selected information from Doodle Company's for 2010 is below (in millions):
 
 What is the amount of cash received from Doodle's customers during 2010?

Accepted Answer

A)  $66.4 
B)  $10.0 
C)  $46.4 
D)  $19.9 
E)  $56.4 
A)  $66.4 
B)  $10.0 
C)  $46.4 
D)  $19.9 
E)  $56.4

Question 6

The statement of cash flows reports:

Accepted Answer

A)  Assets, liabilities and equity 
B)  Revenues, gains, expenses and losses 
C)  Cash inflows and outflows for an accounting period 
D)  Equity, net income and dividends 
E)  Changes in equity 
A)  Assets, liabilities and equity 
B)  Revenues, gains, expenses and losses 
C)  Cash inflows and outflows for an accounting period 
D)  Equity, net income and dividends 
E)  Changes in equity

Question 7

The conversion of preferred stock to common stock is disclosed in the financing section of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 8

The FASB requires a reconciliation of net income to net cash provided or used by operating activities when the ______________ method is used.

Accepted Answer

The answer of The FASB requires a reconciliation of net...

Question 9

Explain the value that separating cash flows into operating activities, investing activities and financing activities has to financial statement users when it comes analyzing cash flows and the company's financial condition.

Accepted Answer

By separating cash flows into three cate

Question 10

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

Accepted Answer

Notes; schedule incl

Question 11

The cash flow on total assets ratio is defined as average total assets divided by operating income.

Accepted Answer

A) True 
 B)False

Question 12

For each of the following independent cases, use the information provided to calculate the missing cash inflow or cash outflow:
(a.)  
(b.)  
(c.)  
(d.)

Accepted Answer

(a.)@#IMG-DLM& 
(b.)

Question 13

Explain how the cash flows from operating activities section of the statement of cash flows is prepared when using the direct method.

Accepted Answer

The direct method for reporting cash flo

Question 14

Wessen Company reports net income of $180,000 for the year ended December 31, 2010. It also reports $45,800 depreciation expense, $21,410 amortization expense and a $15,000 gain on the sale of machinery. Its comparative balance sheets reveal a $28,300 increase in accounts receivable, $20,400 decrease in accounts payable, $10,470 increase in prepaid expenses, and $33,140 decrease in wages payable. What is the net cash flows provided (used) by operating activities using the indirect method?

Accepted Answer

A)  ($140,200) 
B)  $133,490 
C)  $140,200 
D)  ($133,490) 
E)  $78,300 
A)  ($140,200) 
B)  $133,490 
C)  $140,200 
D)  ($133,490) 
E)  $78,300

Question 15

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 16

Use the following company information to prepare a schedule of significant noncash investing and financing activities:
(a) Sold a building with a book value of $125,000 for $195,000 cash and land with a book value of $32,000 for $65,000 cash.
(b) Issued 10,000 shares of $10 par value common stock in exchange for equipment with a market value of $135,000.
(c) Retired a $100,000, 10% bond by issuing another $100,000, 12% bond issue.
(d) Acquired land by issuing a ten-year, 9%, $44,000 note payable.

Accepted Answer

Schedule of noncash

Question 17

When preparing the operating section of the statement of cash flows using the indirect method, non-operating gains are added back to net income.

Accepted Answer

A) True 
 B)False

Question 18

Most managers stress the importance of understanding and predicting cash flows for business decisions.

Accepted Answer

A) True 
 B)False

Question 19

The cash flow on total assets ratio is computed by dividing _____________ by ____________.

Accepted Answer

Cash flows

Question 20

Under IFRS, cash outflows for interest expense are classified as

Accepted Answer

A)  Operating 
B)  Investing 
C)  Financing 
D)  Operating, Investing or Financing assuming that the classification is applied consistently across all periods 
E)  Investing or Financing, depending upon who is the recipient of the interest paid 
A)  Operating 
B)  Investing 
C)  Financing 
D)  Operating, Investing or Financing assuming that the classification is applied consistently across all periods 
E)  Investing or Financing, depending upon who is the recipient of the interest paid

Exam 12: Reporting and Analyzing Cash Flows

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

The use of a spreadsheet for analysis is especially useful when preparing the statement of cash flows using the _____________ method.

The statement of cash flows explains the difference between the beginning and ending balances of cash and cash equivalents.

_____________ activities include the cash effects of transactions and events that determine net income.

Selected information from Doodle Company's for 2010 is below (in millions): What is the amount of cash received from Doodle's customers during 2010?

The statement of cash flows reports:

The conversion of preferred stock to common stock is disclosed in the financing section of the statement of cash flows.

The FASB requires a reconciliation of net income to net cash provided or used by operating activities when the ______________ method is used.

Explain the value that separating cash flows into operating activities, investing activities and financing activities has to financial statement users when it comes analyzing cash flows and the company's financial condition.

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

The cash flow on total assets ratio is defined as average total assets divided by operating income.

For each of the following independent cases, use the information provided to calculate the missing cash inflow or cash outflow: (a.) (b.) (c.) (d.)

Explain how the cash flows from operating activities section of the statement of cash flows is prepared when using the direct method.

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

When preparing the operating section of the statement of cash flows using the indirect method, non-operating gains are added back to net income.

Most managers stress the importance of understanding and predicting cash flows for business decisions.

The cash flow on total assets ratio is computed by dividing _____________ by ____________.

Under IFRS, cash outflows for interest expense are classified as

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash and Internal Controls

Accounts and Notes Receivable

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Corporate Reporting and Analysis

Analyzing Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Master Budgets and Performance Planning

Flexible Budgets and Standard Costing

Decentralization and Performance Evaluation

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Investments and International Operations

Accounting for Partnerships

Appendix : Accounting With Special Journals

Filters

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

The cash flow on total assets ratio is computed by dividing _ by .