Question 1

Identify several alternatives for presenting significant noncash activities in financial statements.
(b) Give three examples of significant noncash transactions.

Accepted Answer

(a) Significant noncash transactions may...

Question 2

Which one of the following items is not necessary in preparing a statement of cash flows?

Accepted Answer

A)   Determine the change in cash
B)   Determine the cash provided by operations
C)   Determine cash from financing and investing activities
D)   Determine the cash in all bank accountsE) A) and D)
F) A) and C)

Question 3

Classify each of the following as a(n):
A. Operating Activity
B. Investing Activity
C. Financing Activity
_____ 1 Issuance of bonds.
_____ 2. Sale of equipment.
_____ 3. Amortization expense.
_____ 4. Purchase of treasury stock.
_____ 5. Receipt of dividends on investment.
_____ 6. Purchase of land.

Accepted Answer

1. C 4. C
...

Question 4

Tatum Company had an increase in inventory of $40,000. The cost of goods sold was $90,000. There was a $5,000 decrease in accounts payable from the prior period. What were Tatum's cash payments to suppliers?

Accepted Answer

A)   $135,000
B)   $85,000
C)   $125,000
D)   $95,000E) A) and B)
F) C) and D)

Question 5

The statement of cash flows will not report the

Accepted Answer

A)   amount of checks outstanding at the end of the period.
B)   sources of cash in the current period.
C)   uses of cash in the current period.
D)   change in the cash balance for the current period.E) B) and D)
F) A) and B) A

Question 6

The net income reported on the income statement for the current year was $240,000. Depreciation was $50,000. Account receivable and inventories decreased by $10,000 and $30,000, respectively. Prepaid expenses and accounts payable increased, respectively, by $1,000 and $8,000. How much cash was provided by operating activities?

Accepted Answer

A)   $301,000
B)   $337,000
C)   $321,000
D)   $329,000E) C) and D)
F) B) and D)

Question 7

Which of the following would not be an adjustment to net income using the indirect method?

Accepted Answer

A)   Depreciation Expense
B)   An increase in Prepaid Insurance
C)   Amortization Expense
D)   An increase in LandE) A) and C)
F) None of the above

Question 8

If a company has both an inflow and outflow of cash related to property, plant, and equipment, the

Accepted Answer

A)   two cash effects can be netted and presented as one item in the investing activities section.
B)   cash inflow and cash outflow should be reported separately in the investing activities section.
C)   two cash effects can be netted and presented as one item in the financing activities section.
D)   cash inflow and cash outflow should be reported separately in the financing activities section.E) C) and D)
F) All of the above

Question 9

Buster Company reported a net loss of $6,000 for the year ended December 31, 2010. During the year, accounts receivable increased $14,000, merchandise inventory decreased $10,000, accounts payable decreased by $20,000, and depreciation expense of $10,000 was recorded. During 2010, operating activities

Accepted Answer

A)   used net cash of $20,000.
B)   used net cash of $28,000.
C)   provided net cash of $28,000.
D)   provided net cash of $18,000.E) B) and D)
F) C) and D)

Question 10

The order of presentation of activities on the statement of cash flows is

Accepted Answer

A)   operating, investing, and financing.
B)   operating, financing, and investing.
C)   financing, operating, and investing.
D)   financing, investing, and operating.E) None of the above
F) B) and C)

Question 11

All major financing and investing activities affect cash.

Accepted Answer

A) True 
 B)False

Question 12

Using the indirect method, patent amortization expense for the period

Accepted Answer

A)   is deducted from net income.
B)   causes cash to increase.
C)   causes cash to decrease.
D)   is added to net income.E) C) and D)
F) A) and B)

Question 13

If a company reports a net loss, it

Accepted Answer

A)   may still have a net increase in cash.
B)   will not be able to pay cash dividends.
C)   will not be able to get a loan.
D)   will not be able to make capital expenditures.E) B) and D)
F) B) and C) A

Question 14

In addition to the three basic financial statements, which of the following is also a required financial statement?

Accepted Answer

A)   the "Cash Budget"
B)   the Statement of Cash Flows
C)   the Statement of Cash Inflows and Outflows
D)   the "Cash Reconciliation"E) None of the above
F) B) and C)

Question 15

Wintz Company reported net income of $295,000 for 2010. Wintz also reported depreciation expense of $45,000 and a loss of $8,000 on the sale of equipment. The comparative balance sheet shows a decrease in accounts receivable of $15,000 for the year, a $17,000 increase in accounts payable, and a $6,000 decrease in prepaid expenses.
Instructions
Prepare the operating activities section of the statement of cash flows for 2010. Use the indirect method.

Accepted Answer

The answer of Wintz Company reported net income of $295,000...

Question 16

Utley Company had a cost of purchases of $250,000. The comparative balance sheet analysis revealed a $10,000 decrease in inventory and a $20,000 increase in accounts payable. What were Utley's cash payments to suppliers?

Accepted Answer

A)   $230,000
B)   $220,000
C)   $260,000
D)   $280,000E) C) and D)
F) B) and D)

Question 17

The statement of cash flows

Accepted Answer

A)   is prepared instead of an income statement under generally accepted accounting principles.
B)   is used to assess an entity's ability to pay dividends and meet obligations.
C)   is prepared from comparative income statements.
D)   reflects earnings per share figures on a cash basis and on an accrual basis in the body of the statement.E) None of the above
F) B) and D) B

Question 18

The third (final)  step in preparing the statement of cash flows is to

Accepted Answer

A)   analyze changes in noncurrent asset and liability accounts.
B)   compare the net change in cash with the change in the cash account reported on the balance sheet.
C)   determine net cash provided by operating activities.
D)   list the noncash activities.E) B) and C)
F) None of the above

Question 19

Free cash flow equals cash provided by

Accepted Answer

A)   operations less capital expenditures and cash dividends.
B)   operations less cash dividends.
C)   investing activities less capital expenditures and cash dividends.
D)   operations less capital expenditures.E) A) and B)
F) All of the above

Question 20

The sale of equipment at less than its book value is a(n) ______________ of cash that is reported in the ______________ activities section.

Accepted Answer

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Exam 17: Statement of Cash Flows

Identify several alternatives for presenting significant noncash activities in financial statements. (b) Give three examples of significant noncash transactions.

Correct Answer
verified
(a) Significant noncash transactions may...
View Answer

Which one of the following items is not necessary in preparing a statement of cash flows?

Correct Answer
verified

Classify each of the following as a(n): A. Operating Activity B. Investing Activity C. Financing Activity ___ 1 Issuance of bonds. _ 2. Sale of equipment. _ 3. Amortization expense. _ 4. Purchase of treasury stock. _ 5. Receipt of dividends on investment. ___ 6. Purchase of land.

Correct Answer
verified
1. C 4. C
...
View Answer

Tatum Company had an increase in inventory of $40,000. The cost of goods sold was $90,000. There was a $5,000 decrease in accounts payable from the prior period. What were Tatum's cash payments to suppliers?

Correct Answer
verified

The statement of cash flows will not report the

Correct Answer
verified
A

Correct Answer
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Which of the following would not be an adjustment to net income using the indirect method?

Correct Answer
verified

If a company has both an inflow and outflow of cash related to property, plant, and equipment, the

Correct Answer
verified

Correct Answer
verified

The order of presentation of activities on the statement of cash flows is

Correct Answer
verified

All major financing and investing activities affect cash.

Correct Answer
verified

Using the indirect method, patent amortization expense for the period

Correct Answer
verified

If a company reports a net loss, it

Correct Answer
verified
A

In addition to the three basic financial statements, which of the following is also a required financial statement?

Correct Answer
verified

Correct Answer
verified

Utley Company had a cost of purchases of $250,000. The comparative balance sheet analysis revealed a $10,000 decrease in inventory and a $20,000 increase in accounts payable. What were Utley's cash payments to suppliers?

Correct Answer
verified

The statement of cash flows

Correct Answer
verified
B

The third (final) step in preparing the statement of cash flows is to

Correct Answer
verified

Free cash flow equals cash provided by

Correct Answer
verified

The sale of equipment at less than its book value is a(n) of cash that is reported in the activities section.

Correct Answer
verified
inflow, in...
View Answer

Exam 17: Statement of Cash Flows

Identify several alternatives for presenting significant noncash activities in financial statements. (b) Give three examples of significant noncash transactions.

Correct Answerverified(a) Significant noncash transactions may...View AnswerShow Answer

Which one of the following items is not necessary in preparing a statement of cash flows?

Correct AnswerverifiedShow Answer

Correct Answerverified1. C 4. C...View AnswerShow Answer

Tatum Company had an increase in inventory of $40,000. The cost of goods sold was $90,000. There was a $5,000 decrease in accounts payable from the prior period. What were Tatum's cash payments to suppliers?

Correct AnswerverifiedShow Answer

The statement of cash flows will not report the

Correct AnswerverifiedA

Correct AnswerverifiedShow Answer

Which of the following would not be an adjustment to net income using the indirect method?

Correct AnswerverifiedShow Answer

If a company has both an inflow and outflow of cash related to property, plant, and equipment, the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The order of presentation of activities on the statement of cash flows is

Correct AnswerverifiedShow Answer

All major financing and investing activities affect cash.

Correct AnswerverifiedShow Answer

Using the indirect method, patent amortization expense for the period

Correct AnswerverifiedShow Answer

If a company reports a net loss, it

Correct AnswerverifiedA

In addition to the three basic financial statements, which of the following is also a required financial statement?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Utley Company had a cost of purchases of $250,000. The comparative balance sheet analysis revealed a $10,000 decrease in inventory and a $20,000 increase in accounts payable. What were Utley's cash payments to suppliers?

Correct AnswerverifiedShow Answer

The statement of cash flows

Correct AnswerverifiedB

The third (final) step in preparing the statement of cash flows is to

Correct AnswerverifiedShow Answer

Free cash flow equals cash provided by

Correct AnswerverifiedShow Answer

The sale of equipment at less than its book value is a(n) ______________ of cash that is reported in the ______________ activities section.

Correct Answerverifiedinflow, in...View AnswerShow Answer

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(a) Significant noncash transactions may...
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1. C 4. C
...
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A

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A

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B

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Correct Answer
verified

The sale of equipment at less than its book value is a(n) of cash that is reported in the activities section.

Correct Answer
verified
inflow, in...
View Answer