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Exam 12: Reporting and Interpreting the Statement of Cash Flows

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Question 31

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The introductory phase of a company's life cycle will most likely have net cash:

A) provided by investing activities.
B) used in financing activities.
C) used in investing activities.
D) provided by operating activities.

E) A) and D)
F) A) and B)

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Question 32

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What is the purpose of the statement of cash flows?

A) It is intended to provide a cash-based view of a company.
B) It illustrates the profitability of a company.
C) It reports the financial position of a company at a specific point in time.
D) It outlines the changes in stockholders' equity accounts from the beginning of the period to the end of the period.

E) B) and C)
F) C) and D)

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Question 33

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A company's income statement for the year shows a net loss of $90,000.Additional information for the year follows: What is the net cash provided by (used in) operating activities?

Which of the following represents a cash inflow from financing activities?

Subtracting a decrease in Unearned Revenue from net income eliminates the effect of recording revenue that:

When preparing the operating activities section of the statement of cash flows using the indirect method,accumulated depreciation is added to net income in the operating section.

Depreciation Expense is not reported on the statement of cash flows when prepared using the direct method.

Which of the following would not be added to net income in calculating cash flows from operating activities on a statement of cash flows prepared using the indirect method?

Which of the following statements about classification choices is correct?

St.Pierre Enterprises reported the following information in its financial statements: -Use the information above to answer the following question.What is the amount of cash payments made to suppliers during the current year?

The advantages of the direct method include all of the following except:

The statement of cash flows cannot be used to determine:

Cash and cash equivalents include assets that:

The purchase of $100,000 of equipment by issuing a note would be reported:

Which of the following statements about cash flows from investing activities is correct?

When the net cash flows from operating,investing,and financing activities are combined to arrive at the overall net change in cash,a net decrease in cash is subtracted from the beginning cash balance to calculate the ending cash balance.

When preparing the operating activities section of the statement of cash flows using the direct method,a gain or loss from selling equipment is reported in the operating activities section of the statement of cash flows.

Two years ago,your company bought $40,000 in bonds from another company.This month,it sold half of those bonds for $20,640 and purchased the common stock of another company for $1,000.On the statement of cash flows for this accounting period,your company would report a net cash:

Condensed financial data of Monopoly Corporation appear below: A cash dividend was declared and paid in full to stockholders during the year. Required: Solve for the missing numbers and summarize your answers in the table below.Be sure to indicate in parentheses ( )if the missing number is negative (that is,a cash outflow).

Choose the appropriate letter to match the term and the definition.Not all definitions will be used. Term 1._____ Cash Inflow 2._____ Property,Plant,and Equipment 3._____ Comparative Balance Sheet 4._____ Free Cash Flow 5._____ Noncash Investing and Financing Activities 6._____ Net Income 7._____ Statement of Cash Flows 8._____ Cash Outflow Definition A.A financial statement that tracks the flow of cash into and out of a company according to the three types of activities that generate the flows. B.Cash flows in excess of net income. C.Reported as supplement disclosures or in the notes section to the financial statements rather than within the body of the statement of cash flows. D.Results from activities such as sales of goods and assets,receipt of cash dividends,and receipts of interest. E.Cash a company receives that is not subject to income tax. F.Purchases and sales of this are classified as investing activities. G.The starting point for calculating operating cash flows with the direct method. H.Cash flows from operations in excess of amount paid to replace property,plant and equipment and to pay cash dividends to stockholders. I.The percent of a company's net cash flow that comes from investing and financing activities. J.An adjustment made when using the indirect method of calculating cash flows from operating activities. K.The starting point for calculating operating cash flows with the indirect method. L.Purchases and sales of this are classified as operating activities. M.A balance sheet that shows the starting and ending balance of the different accounts; it is used to calculate the net cash flow provided by operating activities. N.Results from activities such as purchases of goods and assets,payment of debt,payment of cash dividends,and payment of taxes.