Question 1

The statement of cash flows should help investors and creditors assess each of the following except the

Accepted Answer

A)   entity's ability to generate future income.
B)   entity's ability to pay dividends.
C)   reasons for the difference between net income and net cash provided by operating activities.
D)   cash investing and financing transactions during the period.E) B) and C)
F) A) and D)

Question 2

Which of the following would be subtracted from net income using the indirect method?

Accepted Answer

A)   Depreciation expense
B)   An increase in accounts receivable
C)   An increase in accounts payable
D)   A decrease in prepaid expensesE) A) and B)
F) All of the above

Question 3

In addition to the three basic financial statements, which of the following is also a required financial statement?

Accepted Answer

A)   the "Cash Budget"
B)   the Statement of Cash Flows
C)   the Statement of Cash Inflows and Outflows
D)   the "Cash Reconciliation"E) A) and B)
F) All of the above

Question 4

The third (final)  step in preparing the statement of cash flows is to

Accepted Answer

A)   analyze changes in noncurrent asset and liability accounts.
B)   compare the net change in cash with the change in the cash account reported on the balance sheet.
C)   determine net cash provided by operating activities.
D)   list the noncash activities.E) All of the above
F) B) and C)

Question 5

The statement of cash flows is a required statement that must be prepared along with an income statement, balance sheet, and retained earnings statement.

Accepted Answer

A) True 
 B)False

Question 6

Free cash flow equals cash provided by operations less capital expenditures and cash dividends.

Accepted Answer

A) True 
 B)False

Question 7

On the statement of cash flows using the indirect method, patent amortization expense will

Accepted Answer

A)   be added to net income in the operating section.
B)   be deducted from net income in the operating section.
C)   appear as an inflow of cash in the investing section.
D)   appear as an outflow of cash in the investing section.E) B) and C)
F) A) and D)

Question 8

The statement of cash flows reports each of the following except

Accepted Answer

A)   cash receipts from operating activities.
B)   cash payments from investing activities.
C)   the net change in cash.
D)   cash sales.E) A) and D)
F) None of the above

Question 9

Which of the following transactions would not be classified as a financing activity?

Accepted Answer

A)   Purchase of treasury stock
B)   Payment of dividends
C)   Issuance of bonds at a discount
D)   Purchase of a long-term investment in bondsE) B) and C)
F) None of the above

Question 10

A loss on sale of equipment is added to net income in determining cash provided by operations under the indirect method.

Accepted Answer

A) True 
 B)False

Question 11

Free cash flow equals cash provided by

Accepted Answer

A)   operations less capital expenditures and cash dividends.
B)   operations less cash dividends.
C)   investing activities less capital expenditures and cash dividends.
D)   operations less capital expenditures.E) A) and D)
F) A) and C)

Question 12

Acquired an investment in IBM stock for cash of $10,000. What is the net cash provided by financing activities?

Accepted Answer

A)   $21,000
B)   $67,000
C)   $28,000
D)   $0E) A) and B)
F) B) and D)

Question 13

The acquisition of a building by issuing bonds would be considered an investing and financing activity that did not affect cash.

Accepted Answer

A) True 
 B)False

Question 14

The statement of cash flows classifies cash receipts and cash payments into two categories: operating activities and nonoperating activities.

Accepted Answer

A) True 
 B)False

Question 15

Each of the following would be reported under operating activities except cash receipts

Accepted Answer

A)   from sales of goods.
B)   from sales of investments.
C)   of interest on loans.
D)   of dividends from investments.E) A) and C)
F) All of the above

Question 16

A company had net income of $210,000. Depreciation expense is $27,000. During the year, Accounts Receivable and Inventory increased $17,000 and $42,000, respectively. Prepaid Expenses and Accounts Payable decreased $5,000 and $6,000, respectively. There was also a loss on the sale of equipment of $2,000. How much cash was provided by operating activities?

Accepted Answer

A)   $175,000
B)   $179,000
C)   $241,000
D)   $271,000E) None of the above
F) B) and C)

Question 17

Which of the following adjustments to convert net income to net cash provided by operating activities is not added to net income?

Accepted Answer

A)   Gain on Sale of Equipment
B)   Depreciation Expense
C)   Patent Amortization Expense
D)   Depletion ExpenseE) C) and D)
F) A) and D)

Question 18

Each of the following is added to net income in computing net cash provided by operating activities except

Accepted Answer

A)   amortization expense.
B)   an increase in accrued expenses payable.
C)   a gain on sale of equipment.
D)   a decrease in inventory.E) B) and D)
F) B) and C)

Question 19

If $250,000 of bonds are issued during the year but $130,000 of old bonds are retired during the year, the statement of cash flows will show a(n)

Accepted Answer

A)   net increase in cash of $120,000.
B)   net decrease in cash of $120,000.
C)   increase in cash of $250,000 and a decrease in cash of $130,000.
D)   net gain on retirement of bonds of $120,000.E) C) and D)
F) A) and B)

Question 20

Which one of the following affects cash during a period?

Accepted Answer

A)   Recording depreciation expense
B)   Declaration of a cash dividend
C)   Write-off of an uncollectible account receivable
D)   Payment of an accounts payableE) C) and D)
F) B) and D)

Exam 13: Statement of Cash Flows

The statement of cash flows is a required statement that must be prepared along with an income statement, balance sheet, and retained earnings statement.

Correct Answer
verified

Acquired an investment in IBM stock for cash of $10,000. What is the net cash provided by financing activities?

Correct Answer
verified

The statement of cash flows reports each of the following except

Correct Answer
verified

Each of the following would be reported under operating activities except cash receipts

Correct Answer
verified

On the statement of cash flows using the indirect method, patent amortization expense will

Correct Answer
verified

A loss on sale of equipment is added to net income in determining cash provided by operations under the indirect method.

Correct Answer
verified

Free cash flow equals cash provided by operations less capital expenditures and cash dividends.

Correct Answer
verified

The statement of cash flows classifies cash receipts and cash payments into two categories: operating activities and nonoperating activities.

Correct Answer
verified

The statement of cash flows should help investors and creditors assess each of the following except the

Correct Answer
verified

In addition to the three basic financial statements, which of the following is also a required financial statement?

Correct Answer
verified

Which one of the following affects cash during a period?

Correct Answer
verified

Which of the following would be subtracted from net income using the indirect method?

Correct Answer
verified

Each of the following is added to net income in computing net cash provided by operating activities except

Correct Answer
verified

The third (final) step in preparing the statement of cash flows is to

Correct Answer
verified

Free cash flow equals cash provided by

Correct Answer
verified

The acquisition of a building by issuing bonds would be considered an investing and financing activity that did not affect cash.

Correct Answer
verified

If $250,000 of bonds are issued during the year but $130,000 of old bonds are retired during the year, the statement of cash flows will show a(n)

Correct Answer
verified

Which of the following transactions would not be classified as a financing activity?

Correct Answer
verified

Which of the following adjustments to convert net income to net cash provided by operating activities is not added to net income?

Correct Answer
verified

Correct Answer
verified

Exam 13: Statement of Cash Flows

The statement of cash flows is a required statement that must be prepared along with an income statement, balance sheet, and retained earnings statement.

Correct AnswerverifiedShow Answer

Acquired an investment in IBM stock for cash of $10,000. What is the net cash provided by financing activities?

Correct AnswerverifiedShow Answer

The statement of cash flows reports each of the following except

Correct AnswerverifiedShow Answer

Each of the following would be reported under operating activities except cash receipts

Correct AnswerverifiedShow Answer

On the statement of cash flows using the indirect method, patent amortization expense will

Correct AnswerverifiedShow Answer

A loss on sale of equipment is added to net income in determining cash provided by operations under the indirect method.

Correct AnswerverifiedShow Answer

Free cash flow equals cash provided by operations less capital expenditures and cash dividends.

Correct AnswerverifiedShow Answer

The statement of cash flows classifies cash receipts and cash payments into two categories: operating activities and nonoperating activities.

Correct AnswerverifiedShow Answer

The statement of cash flows should help investors and creditors assess each of the following except the

Correct AnswerverifiedShow Answer

In addition to the three basic financial statements, which of the following is also a required financial statement?

Correct AnswerverifiedShow Answer

Which one of the following affects cash during a period?

Correct AnswerverifiedShow Answer

Which of the following would be subtracted from net income using the indirect method?

Correct AnswerverifiedShow Answer

Each of the following is added to net income in computing net cash provided by operating activities except

Correct AnswerverifiedShow Answer

The third (final) step in preparing the statement of cash flows is to

Correct AnswerverifiedShow Answer

Free cash flow equals cash provided by

Correct AnswerverifiedShow Answer

The acquisition of a building by issuing bonds would be considered an investing and financing activity that did not affect cash.

Correct AnswerverifiedShow Answer

If $250,000 of bonds are issued during the year but $130,000 of old bonds are retired during the year, the statement of cash flows will show a(n)

Correct AnswerverifiedShow Answer

Which of the following transactions would not be classified as a financing activity?

Correct AnswerverifiedShow Answer

Which of the following adjustments to convert net income to net cash provided by operating activities is not added to net income?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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