Question 1

A gain on the sale of a plant asset should be included in which of the following sections of a statement of cash flows prepared using the direct method?

Accepted Answer

A)   Investing activities
B)   Operating activities
C)   Financing activities
D)   Any of these, if applied consistently from year to yearE) C) and D)
F) B) and D)

Question 2

Cash flows from financing activities would be reduced by which of the following?

Accepted Answer

A)   Purchase of inventory
B)   Repayment of long-term debt
C)   Purchase of machinery
D)   Payment of interestE) All of the above
F) B) and C)

Question 3

Stevenson Company reported a net loss of $23,000 during the year. Comparing beginning and ending balances, you determine the following: (1)  accounts receivable increased by $8,000; and (2)  accrued expenses payable increased by $5,000. What was the amount of cash used in operating activities during the year?

Accepted Answer

A)   $10,000
B)   $36,000
C)   $20,000
D)   $26,000E) C) and D)
F) B) and C)

Question 4

When preparing a statement of cash flows using the direct method, amortization of a patent is

Accepted Answer

A)   shown as an increase in cash flows from operating activities.
B)   shown as a reduction in cash flows from operating activities.
C)   included with supplemental disclosures of noncash transactions.
D)   not reported in the statement of cash flows or related disclosures.E) All of the above
F) None of the above

Question 5

Patriot Corporation purchased a 3-month U.S. Treasury bill. In preparing Patriot's statement of cash flows, this purchase would

Accepted Answer

A)   have no effect.
B)   be treated as an outflow from operating activities.
C)   be treated as an outflow from investing activities.
D)   be treated as an outflow from financing activities.E) All of the above
F) B) and D)

Question 6

Which of the following would be an addition to net income when using the indirect method to derive net cash flows from operating activities?

Accepted Answer

A)   Payment of cash dividends
B)   Decrease in accounts payable
C)   Increase in merchandise inventory
D)   Loss on sale of machinery and equipmentE) None of the above
F) All of the above

Question 7

Which of the following is not a source of cash?

Accepted Answer

A)   Sale of equipment below book value at a loss
B)   Issuance of bonds payable below par value at a discount
C)   Declaration of a cash dividend to be paid in the next accounting period
D)   Collection of a long-term note receivable from a customerE) B) and D)
F) B) and C)

Question 8

Samson, Inc., presents the following comparative balance sheets and income statement (all amounts in thousands of dollars):
  
1Includes interest paid in cash of $23.
See information regarding Samson, Inc. above. The following additional information is provided:
  
Required:
Compute the following:

Accepted Answer

Question 9

Using the indirect method, cash flows from operating activities would be increased by which of the following?

Accepted Answer

A)   Gain on sale of investments
B)   Increase in prepaid expenses
C)   Decrease in accounts payable
D)   Decrease in accounts receivableE) All of the above
F) A) and C)

Question 10

In a statement of cash flows (indirect method) , depreciation is treated as an adjustment to reported net income because depreciation

Accepted Answer

A)   reduces the reported net income but does not involve an outflow of cash.
B)   reduces the reported net income and involves an inflow of cash.
C)   is an inflow of cash to a reserve account for asset replacement.
D)   usually represents a significant portion of operating expenses.E) A) and B)
F) None of the above

Question 11

Adlake Corporation provides the following account balances for 2011 and 2010:

Accepted Answer

The answer of Adlake Corporation provides the following account balances...

Question 12

The following data were taken from the books of Young Company.
  
Cash dividends of $169,000 were declared and paid during 2011. Also, $56,000 of preferred stock was issued during the period.
Compute the net cash flow provided by (used in) operating activities during 2011 for Young Company.

Accepted Answer

The answer of The following data were taken from the...

Question 13

In a statement of cash flows, receipts from sales of property, plant, and equipment would be classified as cash inflows from

Accepted Answer

A)   liquidating activities.
B)   operating activities.
C)   investing activities.
D)   financing activities.E) A) and B)
F) B) and C)

Question 14

Noncash investing and financing activities, if material, are

Accepted Answer

A)   reported in the statement of cash flows under the "all-financial-resources concept."
B)   reported in the statement of cash flows only if the indirect method is used.
C)   disclosed in a note or separate schedule accompanying the statement of cash flows.
D)   not reported or disclosed because they have no impact on cash.E) A) and B)
F) B) and C)

Question 15

Which of the following is a noncash transaction that should be disclosed in a schedule accompanying the statement of cash flows?

Accepted Answer

A)   Sale of an investment for cash
B)   Purchase of a machine for cash
C)   Issuance of common stock in exchange for land
D)   Declaration and payment of a cash dividend on common stockE) A) and B)
F) A) and C)

Question 16

In a statement of cash flows, payments to acquire debt instruments of other entities would typically be classified as cash outflows for

Accepted Answer

A)   financing activities.
B)   investing activities.
C)   operating activities.
D)   equity activities.E) A) and B)
F) C) and D)

Question 17

Which of the following statements regarding cash equivalents is correct?

Accepted Answer

A)   A one-year Treasury note could not qualify as a cash equivalent.
B)   All investments meeting the FASB's criteria for cash equivalents must be reported as such.
C)   The date a security is purchased determines its "original maturity" for cash equivalent classification purposes.
D)   Once established, management's policy for classifying items as cash equivalents cannot be changed.E) All of the above
F) A) and D)

Question 18

Chow Company's 2011 income statement reported cost of goods sold as $135,000. Additional information is as follows:

If Chow uses the direct method, what amount should Chow report as cash paid to suppliers in its 2011 statement of cash flows?

Accepted Answer

A)   $121,000
B)   $134,000
C)   $136,000
D)   $149,000E) B) and C)
F) None of the above

Question 19

A loss on the sale of machinery in the ordinary course of business should be presented in a statement of cash flows (indirect method)  as

Accepted Answer

A)   a deduction from net income.
B)   an addition to net income.
C)   an inflow and outflow of cash.
D)   an outflow of cash.E) A) and C)
F) B) and C)

Question 20

In a statement of cash flows, which of the following would increase reported cash flows from operating activities using the direct method?

Accepted Answer

A)   Collection of a note receivable
B)   Dividends received from investments
C)   Gain on purchase of treasury stock
D)   Gain on sale of equipmentE) C) and D)
F) A) and B)

Exam 5: Statement of Cash Flows and Articulation

In a statement of cash flows, payments to acquire debt instruments of other entities would typically be classified as cash outflows for

Correct Answer
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Using the indirect method, cash flows from operating activities would be increased by which of the following?

Correct Answer
verified

The following data were taken from the books of Young Company. Cash dividends of $169,000 were declared and paid during 2011. Also, $56,000 of preferred stock was issued during the period. Compute the net cash flow provided by (used in) operating activities during 2011 for Young Company.

Correct Answer
verified

When preparing a statement of cash flows using the direct method, amortization of a patent is

Correct Answer
verified

Noncash investing and financing activities, if material, are

Correct Answer
verified

Samson, Inc., presents the following comparative balance sheets and income statement (all amounts in thousands of dollars): ¹Includes interest paid in cash of $23. See information regarding Samson, Inc. above. The following additional information is provided: Required: Compute the following:

Correct Answer
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Cash flows from financing activities would be reduced by which of the following?

Correct Answer
verified

Chow Company's 2011 income statement reported cost of goods sold as $135,000. Additional information is as follows: If Chow uses the direct method, what amount should Chow report as cash paid to suppliers in its 2011 statement of cash flows?

Correct Answer
verified

A gain on the sale of a plant asset should be included in which of the following sections of a statement of cash flows prepared using the direct method?

Correct Answer
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Correct Answer
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Which of the following would be an addition to net income when using the indirect method to derive net cash flows from operating activities?

Correct Answer
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Adlake Corporation provides the following account balances for 2011 and 2010:

Correct Answer
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In a statement of cash flows, which of the following would increase reported cash flows from operating activities using the direct method?

Correct Answer
verified

Patriot Corporation purchased a 3-month U.S. Treasury bill. In preparing Patriot's statement of cash flows, this purchase would

Correct Answer
verified

Which of the following is a noncash transaction that should be disclosed in a schedule accompanying the statement of cash flows?

Correct Answer
verified

A loss on the sale of machinery in the ordinary course of business should be presented in a statement of cash flows (indirect method) as

Correct Answer
verified

In a statement of cash flows, receipts from sales of property, plant, and equipment would be classified as cash inflows from

Correct Answer
verified

Which of the following is not a source of cash?

Correct Answer
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Which of the following statements regarding cash equivalents is correct?

Correct Answer
verified

In a statement of cash flows (indirect method) , depreciation is treated as an adjustment to reported net income because depreciation

Correct Answer
verified

Exam 5: Statement of Cash Flows and Articulation

In a statement of cash flows, payments to acquire debt instruments of other entities would typically be classified as cash outflows for

Correct AnswerverifiedShow Answer

Using the indirect method, cash flows from operating activities would be increased by which of the following?

Correct AnswerverifiedShow Answer

The following data were taken from the books of Young Company. Cash dividends of $169,000 were declared and paid during 2011. Also, $56,000 of preferred stock was issued during the period. Compute the net cash flow provided by (used in) operating activities during 2011 for Young Company.

Correct AnswerverifiedShow Answer

When preparing a statement of cash flows using the direct method, amortization of a patent is

Correct AnswerverifiedShow Answer

Noncash investing and financing activities, if material, are

Correct AnswerverifiedShow Answer

Samson, Inc., presents the following comparative balance sheets and income statement (all amounts in thousands of dollars): 1Includes interest paid in cash of $23. See information regarding Samson, Inc. above. The following additional information is provided: Required: Compute the following:

Correct AnswerverifiedShow Answer

Cash flows from financing activities would be reduced by which of the following?

Correct AnswerverifiedShow Answer

Chow Company's 2011 income statement reported cost of goods sold as $135,000. Additional information is as follows: If Chow uses the direct method, what amount should Chow report as cash paid to suppliers in its 2011 statement of cash flows?

Correct AnswerverifiedShow Answer

A gain on the sale of a plant asset should be included in which of the following sections of a statement of cash flows prepared using the direct method?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following would be an addition to net income when using the indirect method to derive net cash flows from operating activities?

Correct AnswerverifiedShow Answer

Adlake Corporation provides the following account balances for 2011 and 2010:

Correct AnswerverifiedShow Answer

In a statement of cash flows, which of the following would increase reported cash flows from operating activities using the direct method?

Correct AnswerverifiedShow Answer

Patriot Corporation purchased a 3-month U.S. Treasury bill. In preparing Patriot's statement of cash flows, this purchase would

Correct AnswerverifiedShow Answer

Which of the following is a noncash transaction that should be disclosed in a schedule accompanying the statement of cash flows?

Correct AnswerverifiedShow Answer

A loss on the sale of machinery in the ordinary course of business should be presented in a statement of cash flows (indirect method) as

Correct AnswerverifiedShow Answer

In a statement of cash flows, receipts from sales of property, plant, and equipment would be classified as cash inflows from

Correct AnswerverifiedShow Answer

Which of the following is not a source of cash?

Correct AnswerverifiedShow Answer

Which of the following statements regarding cash equivalents is correct?

Correct AnswerverifiedShow Answer

In a statement of cash flows (indirect method) , depreciation is treated as an adjustment to reported net income because depreciation

Correct AnswerverifiedShow Answer

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Samson, Inc., presents the following comparative balance sheets and income statement (all amounts in thousands of dollars): ¹Includes interest paid in cash of $23. See information regarding Samson, Inc. above. The following additional information is provided: Required: Compute the following:

Correct Answer
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