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The appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is:


A) Operating activities.
B) Financing activities.
C) Investing activities.
D) Schedule of noncash investing or financing activity.
E) None of these.This is not reported on the statement of cash flows.

F) A) and E)
G) D) and E)

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The statement of cash flows reports:


A) Cash flows from operating activities.
B) Cash flows from financing activities.
C) Cash flows from investing activities.
D) Significant noncash financing and investing activities.
E) All of the choices are reported on a statement of cash flows.

F) A) and B)
G) A) and C)

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Aster Company's 2013 income statement and changes in selected balance sheet accounts are given below.Calculate the company's net cash provided or used by operating activities using the direct method. Aster Company's 2013 income statement and changes in selected balance sheet accounts are given below.Calculate the company's net cash provided or used by operating activities using the direct method. The company also experienced the following during 2013: The company also experienced the following during 2013: Aster Company's 2013 income statement and changes in selected balance sheet accounts are given below.Calculate the company's net cash provided or used by operating activities using the direct method. The company also experienced the following during 2013:

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Weston is preparing the company's statement of cash flows for the fiscal year just ended.Using the following information,determine the amount of cash flows from investing activities: Weston is preparing the company's statement of cash flows for the fiscal year just ended.Using the following information,determine the amount of cash flows from investing activities: A) $(107,700) . B) $107,700. C) $(200,000) . D) $(139,700) . E) $(207,700) .


A) $(107,700) .
B) $107,700.
C) $(200,000) .
D) $(139,700) .
E) $(207,700) .

F) All of the above
G) B) and E)

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Which one of the following is representative of typical cash flows from operating activities?


A) Proceeds from collecting the principal amounts of loans.
B) Repayment of principals on loans.
C) Proceeds from the issuance of bonds and notes payable.
D) Payments by a merchandiser to acquire equity securities of other companies.
E) Receipts of cash sales.

F) B) and E)
G) None of the above

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The cash flow on total assets ratio:


A) Is the same as return on assets.
B) Is the same as profit margin.
C) Can be an indicator of earnings quality.
D) Is highly affected by accounting principles of income recognition and measurement.
E) Is average net assets divided by cash flows from operations.

F) A) and C)
G) A) and B)

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Hancock reported assets of $13,362 million at January 1 and $13,369 million as of December 31 of the current year.Hancock's net cash flows from operations were $2,204 million.Calculate the cash flow on total assets ratio for Hancock.

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Cash Flow on Total Assets = Ca...

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Which of the following items is reported on the statement of cash flows under financing activities?


A) Declaration of a cash dividend.
B) Payment of a cash dividend.
C) Declaration of a stock dividend.
D) Payment of a stock dividend.
E) Stock split.

F) D) and E)
G) None of the above

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When using the indirect method to calculate and report the net cash provided or used by operating activities,net income is adjusted for:


A) Gains and losses from nonoperating items.
B) Revenues and expenses that did not provide or use cash.
C) Changes in noncash current assets and current liabilities related to operating activities.
D) Changes in current liabilities related to operating activities.
E) All of the options are correct.

F) All of the above
G) A) and E)

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E

The first line item in the operating activities section of a spreadsheet for a statement of cash flows prepared using the indirect method is:


A) Cash.
B) Cash received from customers.
C) Increase (decrease) in accounts receivable.
D) Net income.
E) Adjustments to net income.

F) C) and E)
G) None of the above

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Use the following financial statements and additional information to (1)prepare a statement of cash flows for the year ended December 31,2013 using the indirect method,and (2)compute the company's cash flow on total assets ratio for 2013. Use the following financial statements and additional information to (1)prepare a statement of cash flows for the year ended December 31,2013 using the indirect method,and (2)compute the company's cash flow on total assets ratio for 2013. Additional Information a.A $20,000 note payable is retired at its carrying value in exchange for cash. b.The only changes affecting retained earnings are net income and cash dividends paid. c.New equipment is acquired for $120,000 cash. d.Received cash for the sale of equipment that had cost $85,000,yielding a gain of $4,700. e.Prepaid expenses relate to Other Expenses on the income statement. f.All purchases and sales of merchandise inventory are on credit. Use the following financial statements and additional information to (1)prepare a statement of cash flows for the year ended December 31,2013 using the indirect method,and (2)compute the company's cash flow on total assets ratio for 2013. Additional Information a.A $20,000 note payable is retired at its carrying value in exchange for cash. b.The only changes affecting retained earnings are net income and cash dividends paid. c.New equipment is acquired for $120,000 cash. d.Received cash for the sale of equipment that had cost $85,000,yielding a gain of $4,700. e.Prepaid expenses relate to Other Expenses on the income statement. f.All purchases and sales of merchandise inventory are on credit. Additional Information a.A $20,000 note payable is retired at its carrying value in exchange for cash. b.The only changes affecting retained earnings are net income and cash dividends paid. c.New equipment is acquired for $120,000 cash. d.Received cash for the sale of equipment that had cost $85,000,yielding a gain of $4,700. e.Prepaid expenses relate to Other Expenses on the income statement. f.All purchases and sales of merchandise inventory are on credit.

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The usual first step in preparing the statement of cash flows is computing the net increase or net decrease in cash.

A) True
B) False

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The statement of cash flows reports and proves the net change in cash for a reporting period.

A) True
B) False

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True

The indirect method separately lists each major item of operating cash receipts and cash payments.

A) True
B) False

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Beewell's net income for the year ended December 31,Year 2 was $185,000.Information from Beewell's comparative balance sheets is given below.Compute the cash received from the sale of its common stock during Year 2. Beewell's net income for the year ended December 31,Year 2 was $185,000.Information from Beewell's comparative balance sheets is given below.Compute the cash received from the sale of its common stock during Year 2. A) $185,000. B) $106,000. C) $95,000. D) $50,000. E) $145,000.


A) $185,000.
B) $106,000.
C) $95,000.
D) $50,000.
E) $145,000.

F) C) and D)
G) A) and B)

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The accountant for Robinson Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available: The accountant for Robinson Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available: The amount of cash dividends paid during the year would be: A) $70,000. B) $46,000. C) $22,000. D) $39,000. E) $24,000. The amount of cash dividends paid during the year would be:


A) $70,000.
B) $46,000.
C) $22,000.
D) $39,000.
E) $24,000.

F) C) and D)
G) B) and C)

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The use of a spreadsheet for analysis is especially useful when preparing the statement of cash flows using the _____________ method.

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Explain the purpose and format of the statement of cash flows.Also describe its relevance to decision makers.

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The purpose of the statement of cash flo...

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

F) A) and E)
G) A) and D)

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The appropriate section in the statement of cash flows for reporting the purchase of land in exchange for common stock is:


A) Operating activities.
B) Financing activities.
C) Investing activities.
D) Schedule of noncash investing or financing activity.
E) Reconciliation of cash balance.

F) B) and C)
G) None of the above

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