Question 1

The gain or loss from retirement of notes payable is reported under cash flows from operating activities on the statement of cash flows using the indirect method.

Accepted Answer

A) True 
 B)False

Question 2

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.

Accepted Answer

A)   $218,000.
B)   $223,200.
C)   $220,000.
D)   $228,800.
E)   $234,000.F) B) and E)
G) B) and D)

Question 3

Based on the following income statement and balance sheet for Bankowski Corporation, determine the cash flows from operating activities using the indirect method.

Accepted Answer

The answer of Based on the following income statement and...

Question 4

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

Accepted Answer

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

Question 5

A company's transactions with its creditors to borrow money and/or to repay the principal amounts of both short- and long-term debt are reported as cash flows from:

Accepted Answer

A)   Operating activities.
B)   Investing activities.
C)   Financing activities.
D)   Direct activities.
E)   Indirect activities.F) A) and E)
G) A) and B)

Question 6

The purchase of long-term assets by issuing a note payable for the entire amount is reported on the statement of cash flows in the:

Accepted Answer

A)   Operating activities.
B)   Financing activities.
C)   Investing activities.
D)   Schedule of noncash financing and investing activities.
E)   Reconciliation of cash balance.F) A) and C)
G) B) and E)

Question 7

The reporting of net cash provided or used by operating activities that lists the major items of operating cash receipts, such as receipts from customers, and subtracts the major items of operating cash disbursements, such as cash paid for merchandise, is referred to as the:

Accepted Answer

A)   Direct method of reporting net cash provided or used by operating activities.
B)   Cash basis of accounting.
C)   Classified statement of cash flows.
D)   Indirect method of reporting net cash provided or used by operating activities.
E)   Net method of reporting cash flows from operating activities.F) B) and D)
G) None of the above

Question 8

Gregor Company reports net income of $305,000 for the year ended December 31. It also reports $93,700 depreciation expense and a $10,000 loss on the sale of equipment. Its comparative balance sheet reveals a $40,200 increase in accounts receivable, a $10,200 decrease in prepaid expenses, a $15,200 increase in accounts payable, a $12,500 decrease in wages payable, and a $100,000 decrease in notes payable. Calculate the cash provided (used)  in operating activities using the indirect method.

Accepted Answer

A)   $461,800.
B)   $371,400.
C)   $381,400.
D)   $351,000.
E)   $361,000.F) C) and E)
G) All of the above

Question 9

A decrease in the inventory account during the year should be reported on the indirect method statement of cash flows as:

Accepted Answer

A)   An increase in cash flows from operating activities
B)   An increase in cash flows from investing activities
C)   A decrease in cash flows from operating activities
D)   A decrease in cash flows from investing activities
E)   An increase in cash flows from financing activitiesF) D) and E)
G) A) and B)

Question 10

________ activities include those transactions that affect long-term liabilities and equity.

Accepted Answer

The answer of ________ activities include those transactions that affect...

Question 11

Noncash financing and investing activities are disclosed in a ________ or in a separate ________.

Accepted Answer

note; schedule inclu...

Question 12

When preparing the operating activities section of the statement of cash flows using the indirect method, expenses and losses with no cash outflows are added back to net income.

Accepted Answer

A) True 
 B)False

Question 13

A company purchased equipment for $150,000 by paying $50,000 and signing a $100,000 note payable. The entire $150,000 is reported as a cash outflow in the financing section of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 14

Jordan's net income for the year ended December 31, Year 2 was $185,000. Information from Jordan's comparative balance sheets is given below. Compute the cash received from the sale of its common stock during Year 2.

Accepted Answer

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

Question 15

All of the following statements related to reporting cash flows from investing and financing activities are true except:

Accepted Answer

A)   Reporting of financing activities is the same under the direct method and indirect method.
B)   Changes in noncurrent liability accounts and equity accounts are analyzed to determine cash flows from financing activities
C)   Changes in noncurrent asset accounts, current notes receivable, and current investments are analyzed to determine cash flows from investing activities.
D)   The direct method applies accrual accounting while the indirect method applies cash basis accounting.
E)   Reporting of investing activities is the same under the direct method and indirect method.F) A) and E)
G) A) and C)

Question 16

Analysis reveals that a company had a net increase in cash of $20,000 for the current year. Net cash provided by operating activities was $18,000; net cash used in investing activities was $10,000 and net cash provided by financing activities was $12,000. If the year-end cash balance is $24,000, the beginning cash balance was:

Accepted Answer

A)   $4,000.
B)   $16,000.
C)   $44,000.
D)   $40,000.
E)   $39,000.F) B) and D)
G) A) and B)

Question 17

When preparing the operating activities section of the statement of cash flows using the indirect method, expenses with no cash outflows are added back to net income.

Accepted Answer

A) True 
 B)False

Question 18

The cash flow on total assets ratio is computed by dividing ________ by ________.

Accepted Answer

cash flows from oper...

Question 19

Alvarez Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available:

The ending balance in retained earnings is:

Accepted Answer

A)   $343,000.
B)   $213,000.
C)   $293,000.
D)   $297,500.
E)   $301,000.F) C) and D)
G) D) and E)

Question 20

The cash flow on total assets ratio is calculated by:

Accepted Answer

A)   Dividing cash flows from operations by average total assets.
B)   Dividing total cash flows by average total assets.
C)   Dividing average total assets by cash flows from financing activities.
D)   Dividing average total assets by total cash flows.
E)   Total cash flows divided by average total assets times 365.F) B) and D)
G) B) and C)

Exam 12: Reporting Cash Flows

Correct Answer
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Correct Answer
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________ activities include those transactions that affect long-term liabilities and equity.

Correct Answer
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When preparing the operating activities section of the statement of cash flows using the indirect method, expenses with no cash outflows are added back to net income.

Correct Answer
verified

Noncash financing and investing activities are disclosed in a or in a separate .

Correct Answer
verified
note; schedule inclu...
View Answer

Based on the following income statement and balance sheet for Bankowski Corporation, determine the cash flows from operating activities using the indirect method.

Correct Answer
verified

The purchase of long-term assets by issuing a note payable for the entire amount is reported on the statement of cash flows in the:

Correct Answer
verified

The gain or loss from retirement of notes payable is reported under cash flows from operating activities on the statement of cash flows using the indirect method.

Correct Answer
verified

A company purchased equipment for $150,000 by paying $50,000 and signing a $100,000 note payable. The entire $150,000 is reported as a cash outflow in the financing section of the statement of cash flows.

Correct Answer
verified

When preparing the operating activities section of the statement of cash flows using the indirect method, expenses and losses with no cash outflows are added back to net income.

Correct Answer
verified

A decrease in the inventory account during the year should be reported on the indirect method statement of cash flows as:

Correct Answer
verified

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.

Correct Answer
verified

A company's transactions with its creditors to borrow money and/or to repay the principal amounts of both short- and long-term debt are reported as cash flows from:

Correct Answer
verified

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

Correct Answer
verified

Alvarez Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: The ending balance in retained earnings is:

Correct Answer
verified

The reporting of net cash provided or used by operating activities that lists the major items of operating cash receipts, such as receipts from customers, and subtracts the major items of operating cash disbursements, such as cash paid for merchandise, is referred to as the:

Correct Answer
verified

Jordan's net income for the year ended December 31, Year 2 was $185,000. Information from Jordan's comparative balance sheets is given below. Compute the cash received from the sale of its common stock during Year 2.

Correct Answer
verified

The cash flow on total assets ratio is computed by dividing by .

Correct Answer
verified
cash flows from oper...
View Answer

The cash flow on total assets ratio is calculated by:

Correct Answer
verified

All of the following statements related to reporting cash flows from investing and financing activities are true except:

Correct Answer
verified

Exam 12: Reporting Cash Flows

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

________ activities include those transactions that affect long-term liabilities and equity.

Correct AnswerverifiedShow Answer

When preparing the operating activities section of the statement of cash flows using the indirect method, expenses with no cash outflows are added back to net income.

Correct AnswerverifiedShow Answer

Noncash financing and investing activities are disclosed in a ________ or in a separate ________.

Correct Answerverifiednote; schedule inclu...View AnswerShow Answer

Based on the following income statement and balance sheet for Bankowski Corporation, determine the cash flows from operating activities using the indirect method.

Correct AnswerverifiedShow Answer

The purchase of long-term assets by issuing a note payable for the entire amount is reported on the statement of cash flows in the:

Correct AnswerverifiedShow Answer

The gain or loss from retirement of notes payable is reported under cash flows from operating activities on the statement of cash flows using the indirect method.

Correct AnswerverifiedShow Answer

A company purchased equipment for $150,000 by paying $50,000 and signing a $100,000 note payable. The entire $150,000 is reported as a cash outflow in the financing section of the statement of cash flows.

Correct AnswerverifiedShow Answer

When preparing the operating activities section of the statement of cash flows using the indirect method, expenses and losses with no cash outflows are added back to net income.

Correct AnswerverifiedShow Answer

A decrease in the inventory account during the year should be reported on the indirect method statement of cash flows as:

Correct AnswerverifiedShow Answer

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.

Correct AnswerverifiedShow Answer

A company's transactions with its creditors to borrow money and/or to repay the principal amounts of both short- and long-term debt are reported as cash flows from:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Alvarez Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: The ending balance in retained earnings is:

Correct AnswerverifiedShow Answer

The reporting of net cash provided or used by operating activities that lists the major items of operating cash receipts, such as receipts from customers, and subtracts the major items of operating cash disbursements, such as cash paid for merchandise, is referred to as the:

Correct AnswerverifiedShow Answer

Jordan's net income for the year ended December 31, Year 2 was $185,000. Information from Jordan's comparative balance sheets is given below. Compute the cash received from the sale of its common stock during Year 2.

Correct AnswerverifiedShow Answer

The cash flow on total assets ratio is computed by dividing ________ by ________.

Correct Answerverifiedcash flows from oper...View AnswerShow Answer

The cash flow on total assets ratio is calculated by:

Correct AnswerverifiedShow Answer

All of the following statements related to reporting cash flows from investing and financing activities are true except:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Noncash financing and investing activities are disclosed in a or in a separate .

Correct Answer
verified
note; schedule inclu...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

The cash flow on total assets ratio is computed by dividing by .

Correct Answer
verified
cash flows from oper...
View Answer

Correct Answer
verified

Correct Answer
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