Question 1

Which of the following is added to net income as an adjustment under the indirect method of preparing the statement of cash flows?

Accepted Answer

A)  Salaries payable increase.
B)  Gain on the sale of land.
C)  Inventory increase.
D)  Accounts receivable increase.E) All of the above
F) C) and D)

Question 2

Which of the following would be classified as an investing cash flow?

Accepted Answer

A)  	Issue bonds.
B)  	Receive cash in advance from a customer. 
C)  	Sell a piece of equipment below cost.
D)  	Repurchase the company’s own shares of common stock.E) None of the above
F) All of the above

Question 3

The indirect method begins with net income,while the direct method considers each of the individual accounts that make up net income.

Accepted Answer

A) True 
 B)False

Question 4

The collection of cash from customers would be classified as which type of cash flow on the Statement of Cash Flows?

Accepted Answer

A)  	Financing.
B)  	Investing.
C)  	Operating.
D)  	Not reported on the statement of cash flows.E) A) and B)
F) C) and D)

Question 5

Cash flows from investing activities do not include cash flows from:

Accepted Answer

A)  Lending.
B)  The sale of equipment.
C)  Borrowing.
D)  The purchase of land and buildings.E) None of the above
F) A) and D)

Question 6

A $10,000 investment on the books of the company is sold for $11,000.How does this transaction affect operating,investing,and financing activities under the indirect method?

Accepted Answer

The $1,000 gain on sale of the investmen...

Question 7

Data Solutions reports income tax expense of $1,700,000.Income taxes payable at the beginning and end of the year are $250,000 and $370,000,respectively.What is the amount of cash paid for income taxes?

Accepted Answer

A)  $1,700,000.
B)  $1,820,000.
C)  $2,070,000.
D)  $1,580,000.E) C) and D)
F) A) and C)

Question 8

In the operating activities section of the statement of cash flows,we start with net income when using:

Accepted Answer

A)  The direct method.
B)  The indirect method.
C)  Both the direct and the indirect method.
D)  Neither the direct nor the indirect method.E) None of the above
F) B) and D)

Question 9

Using the direct method,we examine each account in the income statement and convert it from an accrual amount to a cash amount.

Accepted Answer

A) True 
 B)False

Question 10

In preparing a statement of cash flows under the indirect method,a decrease in accounts receivable would be reported or included as a(n) :

Accepted Answer

A)   Addition to net income in the operating activities section.
B)  	Deduction from net income in the operating activities section.
C)  	Financing activity.
D)  	Investing activity.E) B) and C)
F) A) and D)

Question 11

Arrow Printers paid $2,000 interest on short-term notes payable,$10,000 interest on long-term bonds,and $6,000 in dividends on its common stock.Arrow would report cash outflows from activities,as follows:

Accepted Answer

A)  Operating,$2,000;Financing $16,000.
B)  Operating,$0;Financing $18,000.
C)  Operating,$12,000;Financing $6,000.
D)  Operating,$18,000;Financing $0.E) A) and B)
F) A) and C)

Question 12

Since depreciation expense reduces net income,companies will add depreciation expense back to net income as a step in arriving at net cash flows from operations under the indirect method.

Accepted Answer

A) True 
 B)False

Question 13

To maximize cash flow from operations,a company strives to increase both cash flows per dollar of sales and sales per dollar of assets invested.

Accepted Answer

A) True 
 B)False

Question 14

Under what section of the Statement of Cash Flows would you classify the purchase of equipment by issuing a long-term note payable?

Accepted Answer

A)  	Operating.
B)  	Investing.
C)  	Financing.
D)  	Noncash activity.E) A) and C)
F) A) and B)

Question 15

All classifications on the Balance Sheet have a general relationship with sections identified on the Statement of Cash Flows.Indicate which relationships are correctly identified in the table below.

Accepted Answer

The answer of All classifications on the Balance Sheet have...

Question 16

Cash paid for financing activities would include cash paid for:

Accepted Answer

A)  	The stock of another company.
B)  	Dividends to stockholders.
C)  	The purchase of treasury stock.
D)  	B and C.E) A) and B)
F) B) and C)

Question 17

Which of the following statements is true?

Accepted Answer

The answer of Which of the following statements is true?...

Question 18

Which of the following items is reported in the operating section of the statement of cash flows using the direct method?

Accepted Answer

A)  Depreciation expense.
B)  Gain on sale of an asset.
C)  Cash received from customers.
D)  Loss on sale of an asset.E) All of the above
F) A) and C)

Question 19

Cash flows from financing activities include:

Accepted Answer

A)  Interest received.
B)  Interest paid.
C)  Dividends received.
D)  Dividends paid.E) All of the above
F) None of the above

Question 20

Use the following information to answer the next 3 questions:
Bad Brad's BBQ had cash flows for the year as follows ($ in millions) :
 
-Bad Brad's would report net cash inflows (outflows) from operating activities in the amount of:

Accepted Answer

A)  $(80) .
B)  $120.
C)  $200.
D)  $420.E) None of the above
F) A) and B)

Exam 11: Statement of Cash Flows

To maximize cash flow from operations,a company strives to increase both cash flows per dollar of sales and sales per dollar of assets invested.

Correct AnswerverifiedShow Answer

Use the following information to answer the next 3 questions: Bad Brad's BBQ had cash flows for the year as follows ($ in millions) : -Bad Brad's would report net cash inflows (outflows) from operating activities in the amount of:

Correct AnswerverifiedShow Answer

Which of the following items is reported in the operating section of the statement of cash flows using the direct method?

Correct AnswerverifiedShow Answer

Cash flows from financing activities include:

Correct AnswerverifiedShow Answer

Data Solutions reports income tax expense of $1,700,000.Income taxes payable at the beginning and end of the year are $250,000 and $370,000,respectively.What is the amount of cash paid for income taxes?

Correct AnswerverifiedShow Answer

The indirect method begins with net income,while the direct method considers each of the individual accounts that make up net income.

Correct AnswerverifiedShow Answer

A $10,000 investment on the books of the company is sold for $11,000.How does this transaction affect operating,investing,and financing activities under the indirect method?

Correct AnswerverifiedThe $1,000 gain on sale of the investmen...View AnswerShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

Using the direct method,we examine each account in the income statement and convert it from an accrual amount to a cash amount.

Correct AnswerverifiedShow Answer

In preparing a statement of cash flows under the indirect method,a decrease in accounts receivable would be reported or included as a(n) :

Correct AnswerverifiedShow Answer

Cash flows from investing activities do not include cash flows from:

Correct AnswerverifiedShow Answer

The collection of cash from customers would be classified as which type of cash flow on the Statement of Cash Flows?

Correct AnswerverifiedShow Answer

Arrow Printers paid $2,000 interest on short-term notes payable,$10,000 interest on long-term bonds,and $6,000 in dividends on its common stock.Arrow would report cash outflows from activities,as follows:

Correct AnswerverifiedShow Answer

Which of the following is added to net income as an adjustment under the indirect method of preparing the statement of cash flows?

Correct AnswerverifiedShow Answer

Cash paid for financing activities would include cash paid for:

Correct AnswerverifiedShow Answer

Under what section of the Statement of Cash Flows would you classify the purchase of equipment by issuing a long-term note payable?

Correct AnswerverifiedShow Answer

All classifications on the Balance Sheet have a general relationship with sections identified on the Statement of Cash Flows.Indicate which relationships are correctly identified in the table below.

Correct AnswerverifiedShow Answer

Since depreciation expense reduces net income,companies will add depreciation expense back to net income as a step in arriving at net cash flows from operations under the indirect method.

Correct AnswerverifiedShow Answer

Which of the following would be classified as an investing cash flow?

Correct AnswerverifiedShow Answer

In the operating activities section of the statement of cash flows,we start with net income when using:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The $1,000 gain on sale of the investmen...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified