Question 1

The statement of cash flows is:

Accepted Answer

A)  Another name for the statement of financial position 
B)  A financial statement that presents information about changes in equity during a period 
C)  A financial statement that reports the cash inflows and outflows for an accounting period and that classifies those cash flows as operating activities, investing activities or financing activities 
D)  A financial statement that lists the types and amounts of assets, liabilities and equity of a business on a specific date 
E)  A financial statement that lists the types and amounts of the revenues and expenses of a business for an accounting period 
A)  Another name for the statement of financial position 
B)  A financial statement that presents information about changes in equity during a period 
C)  A financial statement that reports the cash inflows and outflows for an accounting period and that classifies those cash flows as operating activities, investing activities or financing activities 
D)  A financial statement that lists the types and amounts of assets, liabilities and equity of a business on a specific date 
E)  A financial statement that lists the types and amounts of the revenues and expenses of a business for an accounting period

Question 2

Holly Company's accounts receivable increased during the year by $8.5 million. It had a bad debt expense of $3.0 million, and its allowance for uncollectible accounts increased by $1.5 million. What is the amount of cash received from customers if Holly's sales were $50.2 million?

Accepted Answer

A)  $40.2 
B)  $63.5 
C)  $60.2 
D)  $37.2 
E)  $54.2 
A)  $40.2 
B)  $63.5 
C)  $60.2 
D)  $37.2 
E)  $54.2

Question 3

When using the indirect method to calculate and report net cash provided or used by operating activities, which of the following is subtracted from net income?

Accepted Answer

A)  Decrease in income taxes payable 
B)  Depreciation expense 
C)  Amortization of intangible assets 
D)  Bad debts expense 
E)  Decrease in merchandise inventory 
A)  Decrease in income taxes payable 
B)  Depreciation expense 
C)  Amortization of intangible assets 
D)  Bad debts expense 
E)  Decrease in merchandise inventory

Question 4

Both cash dividends received and interest received are considered to be investing inflows.

Accepted Answer

A) True 
 B)False

Question 5

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 6

Use the following information and the indirect method to calculate the net cash provided or used by operating activities:

Accepted Answer

A)  $12,700 
B)  $13,900 
C)  $20,900 
D)  $28,400 
E)  $35,900 
A)  $12,700 
B)  $13,900 
C)  $20,900 
D)  $28,400 
E)  $35,900

Question 7

Both the direct and indirect methods yield the identical net cash flow amount provided or used by operating activities.

Accepted Answer

A) True 
 B)False

Question 8

___________________ activities generally include those transactions and events that affect long-term assets.

Accepted Answer

The answer of ___________________ activities generally include those transactions and...

Question 9

The following information is available for the Ehrens Corporation:
    
Additional information:
(1) There was no gain or loss on the sales of the long-term investments, nor on the bonds retired.
(2) Old equipment with an original cost of $37,550 was sold for $2,100 cash.
(3) New equipment was purchased for $67,550 cash.
(4) Cash dividends of $33,600 were paid.
(5) Additional shares of stock were issued for cash.
Prepare a complete statement of cash flows for the 2010 calendar year using the indirect method.

Accepted Answer

(a) Received from sales of lon

Question 10

Wilma Corporation prepares its statement of cash flows using the indirect method to report operating activities. Net income for the 2011 fiscal year was $634,000. Depreciation and amortization expense of $60,000 and 30,000 respectively were included with operating expenses in the income statement. The following information describes the changes in current assets and liabilities other than cash: 
  
Determine the net cash flow provided (used) by operating activities.

Accepted Answer

A)  ($692,500) 
B)  $692,500 
C)  $723,700 
D)  ($536,300) 
E)  ($723,700) 
A)  ($692,500) 
B)  $692,500 
C)  $723,700 
D)  ($536,300) 
E)  ($723,700)

Question 11

Water Girl Corp.'s 2010 income statement follows:
  
The company also experienced the following during 2010:
 
Required:
Calculate the company's net cash provided or used by operating activities using the direct method.

Accepted Answer

The answer of Water Girl Corp.'s 2010 income statement follows:
...

Question 12

Use the following information to calculate cash received from dividends:

Accepted Answer

A)  $26,400 
B)  $29,000 
C)  $29,800 
D)  $30,600 
E)  $32,400 
A)  $26,400 
B)  $29,000 
C)  $29,800 
D)  $30,600 
E)  $32,400

Question 13

Non-cash financing activities are disclosed in a note in the financing section of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 14

Spirit Company, a merchandiser, recently completed the 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 
 
Determine the cash received by Spirit for the equipment sold in item C above.

Accepted Answer

A)  $5,875 
B)  $11,625 
C)  $46,500 
D)  $17,500 
E)  $20,000 
A)  $5,875 
B)  $11,625 
C)  $46,500 
D)  $17,500 
E)  $20,000

Question 15

Financing activities include receiving cash dividends from investments in other companies' stocks.

Accepted Answer

A) True 
 B)False

Question 16

When the operating activities section of the statement of cash flows is reported using the direct method, the FASB requires:

Accepted Answer

A)  The preparation of the statement of cash flows under the indirect method be completed and reported with the statement of cash flows prepared using the direct method 
B)  A reconciliation of net income to net cash provided or used by operating activities 
C)  Footnotes to the financial statements disclosing the difference between net income and the cash provided or used by financing activities 
D)  The income statement to be prepared under the cash basis of accounting 
E)  Noncash investing and financing activities must be included in the statement of cash flows 
A)  The preparation of the statement of cash flows under the indirect method be completed and reported with the statement of cash flows prepared using the direct method 
B)  A reconciliation of net income to net cash provided or used by operating activities 
C)  Footnotes to the financial statements disclosing the difference between net income and the cash provided or used by financing activities 
D)  The income statement to be prepared under the cash basis of accounting 
E)  Noncash investing and financing activities must be included in the statement of cash flows

Question 17

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

The answer of Use the following company information to calculate...

Question 18

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 19

A company's inventory balance at 12/31/08 was $200,000 and was $188,000 at 12/31/09. Its accounts payable balance at 12/31/08 was $80,000 and was $84,000 at 12/31/09 and its cost of goods sold for 2009 was $720,000. The company's total amount of cash payments for merchandise in 2009 equals:

Accepted Answer

A)  $704,000 
B)  $712,000 
C)  $720,000 
D)  $728,000 
E)  $736,000 
A)  $704,000 
B)  $712,000 
C)  $720,000 
D)  $728,000 
E)  $736,000

Question 20

A company had cost of goods sold of $150,000 during a given period. Compute cash paid for merchandise during this period given the following data.

Accepted Answer

A)  $145,500 
B)  $159,500 
C)  $140,500 
D)  $154,500 
E)  $157,000 
A)  $145,500 
B)  $159,500 
C)  $140,500 
D)  $154,500 
E)  $157,000

Exam 12: Reporting and Analyzing Cash Flows

The statement of cash flows is:

Holly Company's accounts receivable increased during the year by $8.5 million. It had a bad debt expense of $3.0 million, and its allowance for uncollectible accounts increased by $1.5 million. What is the amount of cash received from customers if Holly's sales were $50.2 million?

When using the indirect method to calculate and report net cash provided or used by operating activities, which of the following is subtracted from net income?

Both cash dividends received and interest received are considered to be investing inflows.

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

Use the following information and the indirect method to calculate the net cash provided or used by operating activities:

Both the direct and indirect methods yield the identical net cash flow amount provided or used by operating activities.

___________________ activities generally include those transactions and events that affect long-term assets.

Water Girl Corp.'s 2010 income statement follows: The company also experienced the following during 2010: Required: Calculate the company's net cash provided or used by operating activities using the direct method.

Use the following information to calculate cash received from dividends:

Non-cash financing activities are disclosed in a note in the financing section of the statement of cash flows.

Financing activities include receiving cash dividends from investments in other companies' stocks.

When the operating activities section of the statement of cash flows is reported using the direct method, the FASB requires:

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

A company's inventory balance at 12/31/08 was $200,000 and was $188,000 at 12/31/09. Its accounts payable balance at 12/31/08 was $80,000 and was $84,000 at 12/31/09 and its cost of goods sold for 2009 was $720,000. The company's total amount of cash payments for merchandise in 2009 equals:

A company had cost of goods sold of $150,000 during a given period. Compute cash paid for merchandise during this period given the following data.

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

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