Question 1

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

Accepted Answer

Operating

Question 2

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

Accepted Answer

A) True 
 B)False  True

Question 3

Use the following information to calculate cash paid for wages and salaries:

Accepted Answer

A) $157,400. 
B) $163,800. 
C) $168,000. 
D) $172,200. 
E) $174,400. 
A) $157,400. 
B) $163,800. 
C) $168,000. 
D) $172,200. 
E) $174,400. B

Question 4

A cash equivalent must be readily convertible to a known amount of cash, and must be sufficiently close to its maturity so its market value is unaffected by interest rate changes.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

The accounting principle that requires important noncash financing and investing activities be reported on the statement of cash flows or in a footnote is the:

Accepted Answer

A) Historical cost principle. 
B) Materiality principle. 
C) Full disclosure principle. 
D) Going concern principle. 
E) Business entity principle. 
A) Historical cost principle. 
B) Materiality principle. 
C) Full disclosure principle. 
D) Going concern principle. 
E) Business entity principle.

Question 7

A machine with a cost of $130,000, current year depreciation expense of $17,000 and accumulated depreciation of $85,000 is sold for $40,000 cash. The amount(s) that should be reported in the operating section of the statement of cash flows is:

Accepted Answer

A) $17,000. 
B) $4,000. 
C) $57,000. 
D) $21,000. 
E) $22,000. 
A) $17,000. 
B) $4,000. 
C) $57,000. 
D) $21,000. 
E) $22,000.

Question 8

A company reported operating cash flows in Year 1 of $33,100 and $26,220 in Year 2. Its average total assets in Year 1 were $262,000 and $313,000 in Year 2. Calculate the cash flow on total assets ratio for both years. Comment on the results.

Accepted Answer

@#IMG-DLM& Comment: The company had a decrease in

Question 9

The reporting of investing and financing activities is _________________ under the direct and indirect methods of preparing the statement of cash flows.

Accepted Answer

The answer of The reporting of investing and financing activities...

Question 10

Addams Corporation paid cash dividends totaling $75,000 during its most recent fiscal year. How should this information be reported on Addam's statement of cash flows?

Accepted Answer

A) In operating activities as a source of funds. 
B) In investing activities as a source of funds. 
C) In investing activities as a use of funds. 
D) In financing activities as a source of funds. 
E) In financing activities as a use of funds. 
A) In operating activities as a source of funds. 
B) In investing activities as a source of funds. 
C) In investing activities as a use of funds. 
D) In financing activities as a source of funds. 
E) In financing activities as a use of funds.

Question 11

Use the information provided to calculate the missing cash received for interest for the period.

Accepted Answer

The answer of Use the information provided to calculate the...

Question 12

Alvez reports net income of $305,000 for the year ended December 31. It also reports $93,700 depreciation expense and a $10,000 loss on the sale of equipment. Its comparative balance sheet reveals a $40,200 increase in accounts receivable, a $10,200 decrease in prepaid expenses, a $15,200 increase in accounts payable, a $12,500 decrease in wages payable, a $75,000 increase in equipment, and a $100,000 decrease in notes payable. Calculate the net increase in cash for the year.

Accepted Answer

A) $216,400. 
B) $281,400. 
C) $381,400. 
D) $206,400. 
E) $406,400. 
A) $216,400. 
B) $281,400. 
C) $381,400. 
D) $206,400. 
E) $406,400.

Question 13

Information to prepare the statement of cash flows usually comes from: (a) comparative balance sheets, (b) current income statement, and (c) additional information.

Accepted Answer

A) True 
 B)False

Question 14

A corporation reported average total assets in Year 1 of $397,350 and $440,800 in Year 2. Its net operating cash flow for Year 1 was $35,667 and $35,790 for Year 2. Calculate the cash flow on total assets ratio for both years. Comment on the results.

Accepted Answer

@#IMG-DLM& Comment: Despite the increase

Question 15

Use the following information to calculate the net cash provided or used by financing activities for the Streams Corporation:
(a) Net income, $10,000
(b) Sold common stock for $40,000 cash
(c) Paid cash dividend of $13,000
(d) Paid bond payable, $28,000
(e) Purchased equipment for $12,000 cash

Accepted Answer

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

Question 16

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.

Accepted Answer

A) $727,000. 
B) $726,300. 
C) $732,700. 
D) $737,300. 
E) $737,700. 
A) $727,000. 
B) $726,300. 
C) $732,700. 
D) $737,300. 
E) $737,700.

Question 17

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 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 equity accounts. 
D) Both noncurrent assets and noncurrent liabilities. 
E) Equity accounts only.

Question 18

For each of the following items, indicate whether it would be classified as either an (O) operating activity, an (I) investing activity, a (F) financial activity, or a significant (N) noncash financing and investing activity.
__________ (1) Cash sales of merchandise.
__________ (2) Sale of land for cash.
__________ (3) Signed a note payable in exchange for cash.
__________ (4) Purchased supplies for cash.
__________ (5) Paid cash to settle an account payable.
__________ (6) Purchased a warehouse in exchange for shares of its stock.
__________ (7) Paid interest on a note payable.
__________ (8) Reissued treasury stock.
__________ (9) Purchased equipment for cash.
_________ (10) Purchased equipment in exchange for a 6-month note payable.

Accepted Answer

1. O; 2. I; 3. F; 4.

Question 19

Use the information provided below to calculate the cash paid for interest for the period.

Accepted Answer

The answer of Use the information provided below to calculate...

Question 20

Cash flow amounts and their timing should be considered when planning and analyzing operating activities.

Accepted Answer

A) True 
 B)False

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

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

Use the following information to calculate cash paid for wages and salaries:

A cash equivalent must be readily convertible to a known amount of cash, and must be sufficiently close to its maturity so its market value is unaffected by interest rate changes.

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

The accounting principle that requires important noncash financing and investing activities be reported on the statement of cash flows or in a footnote is the:

A machine with a cost of $130,000, current year depreciation expense of $17,000 and accumulated depreciation of $85,000 is sold for $40,000 cash. The amount(s) that should be reported in the operating section of the statement of cash flows is:

A company reported operating cash flows in Year 1 of $33,100 and $26,220 in Year 2. Its average total assets in Year 1 were $262,000 and $313,000 in Year 2. Calculate the cash flow on total assets ratio for both years. Comment on the results.

The reporting of investing and financing activities is _________________ under the direct and indirect methods of preparing the statement of cash flows.

Addams Corporation paid cash dividends totaling $75,000 during its most recent fiscal year. How should this information be reported on Addam's statement of cash flows?

Use the information provided to calculate the missing cash received for interest for the period.

Information to prepare the statement of cash flows usually comes from: (a) comparative balance sheets, (b) current income statement, and (c) additional information.

A corporation reported average total assets in Year 1 of $397,350 and $440,800 in Year 2. Its net operating cash flow for Year 1 was $35,667 and $35,790 for Year 2. Calculate the cash flow on total assets ratio for both years. Comment on the results.

Use the following information to calculate the net cash provided or used by financing activities for the Streams Corporation: (a) Net income, $10,000 (b) Sold common stock for $40,000 cash (c) Paid cash dividend of $13,000 (d) Paid bond payable, $28,000 (e) Purchased equipment for $12,000 cash

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.

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

Use the information provided below to calculate the cash paid for interest for the period.

Cash flow amounts and their timing should be considered when planning and analyzing operating activities.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for 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

Applying Present and Future Values

Investments and International Operations

Reporting and Analyzing Partnerships

Filters

Exam 12: Reporting and Analyzing Cash Flows

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

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

Use the following information to calculate cash paid for wages and salaries:

A cash equivalent must be readily convertible to a known amount of cash, and must be sufficiently close to its maturity so its market value is unaffected by interest rate changes.

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

The accounting principle that requires important noncash financing and investing activities be reported on the statement of cash flows or in a footnote is the:

A machine with a cost of $130,000, current year depreciation expense of $17,000 and accumulated depreciation of $85,000 is sold for $40,000 cash. The amount(s) that should be reported in the operating section of the statement of cash flows is:

A company reported operating cash flows in Year 1 of $33,100 and $26,220 in Year 2. Its average total assets in Year 1 were $262,000 and $313,000 in Year 2. Calculate the cash flow on total assets ratio for both years. Comment on the results.

The reporting of investing and financing activities is _________________ under the direct and indirect methods of preparing the statement of cash flows.

Addams Corporation paid cash dividends totaling $75,000 during its most recent fiscal year. How should this information be reported on Addam's statement of cash flows?

Use the information provided to calculate the missing cash received for interest for the period.

Information to prepare the statement of cash flows usually comes from: (a) comparative balance sheets, (b) current income statement, and (c) additional information.

A corporation reported average total assets in Year 1 of $397,350 and $440,800 in Year 2. Its net operating cash flow for Year 1 was $35,667 and $35,790 for Year 2. Calculate the cash flow on total assets ratio for both years. Comment on the results.

Use the following information to calculate the net cash provided or used by financing activities for the Streams Corporation: (a) Net income, $10,000 (b) Sold common stock for $40,000 cash (c) Paid cash dividend of $13,000 (d) Paid bond payable, $28,000 (e) Purchased equipment for $12,000 cash

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.

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

Use the information provided below to calculate the cash paid for interest for the period.

Cash flow amounts and their timing should be considered when planning and analyzing operating activities.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for 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

Applying Present and Future Values

Investments and International Operations

Reporting and Analyzing Partnerships

Filters