Question 1

A decrease in cash dividends payable means that dividends declared were less than dividends paid.

Accepted Answer

A) True 
 B)False

Question 2

The sale of stock and the sale of bonds are reported as financing activities. Are payments of dividends to shareholders and payments of interest to bondholders also reported as financing activities? Explain.

Accepted Answer

The payment of cash dividends to shareho...

Question 3

On June 4, White Corporation issued $400 million of bonds for $386 million. During the same year, $1 million of the bond discount was amortized. In a statement of cash flows prepared by the indirect method, White Corporation should report:

Accepted Answer

A)  A financing activity of $400 million.
B)  An addition to net income of $1 million.
C)  An investing activity of $386 million.
D)  A deduction from net income of $1 million.E) A) and B)
F) None of the above

Question 4

Partial balance sheets and additional information are listed below for Ensign Company.  Additional information for 2013:
Net income was $170,000.
Depreciation expense was $30,000.
Sales totaled $400,000.
Cost of goods sold totaled $145,000.
Required:
Calculate the amount of cash paid to merchandise suppliers during 2013.

Accepted Answer

The answer of Partial balance sheets and additional information are...

Question 5

Listed below are the reporting classifications for a statement of cash flows using the direct method for reporting operating cash flows. Indicate the reporting classification that would apply to each of the five transactions described below by placing the number of the reporting classification in the space provided by each transaction.

Accepted Answer

The answer of Listed below are the reporting classifications for...

Question 6

In its 2013 income statement, WME reported $695,000 for service revenue earned from membership fees. WME received $681,000 cash in advance from members during 2013. In its reconciliation schedule, WME should:

Accepted Answer

A)  Show a $14,000 negative adjustment to net income under the indirect method for the increase in unearned revenue.
B)  Show a $14,000 negative adjustment to net income under the indirect method for the decrease in unearned revenue.
C)  Show a $14,000 positive adjustment to net income under the indirect method for the increase in unearned revenue.
D)  Show a $14,000 positive adjustment to net income under the indirect method for the decrease in unearned revenue.E) B) and D)
F) A) and D)

Question 7

Which of the following is not an inflow of cash?

Accepted Answer

A)  Depletion.
B)  Cash borrowed on a short-term note.
C)  Sale of a computer.
D)  Cash borrowed on a long-term note.E) B) and C)
F) A) and B)

Question 8

Cash paid to suppliers under the direct method is computed as:

Accepted Answer

A)  Cost of goods sold plus a decrease in inventory and minus an increase in accounts payable.
B)  Cost of goods sold plus an increase in inventory and minus an increase in accounts payable.
C)  Cost of goods sold minus a decrease in inventory and plus an increase in accounts payable.
D)  Cost of goods sold minus an increase in inventory and plus an increase in accounts payable.E) All of the above
F) None of the above

Question 9

Which of the following financial statements is prepared as of a particular point in time rather than for a period of time?

Accepted Answer

A)  Statement of cash flows.
B)  Income statement.
C)  Statement of shareholders' equity.
D)  Balance sheet.E) B) and D)
F) A) and D)

Question 10

Which of the following is reported as an operating activity in the statement of cash flows?

Accepted Answer

A)  The payment of dividends.
B)  The sale of office equipment.
C)  The payment of interest on long-term notes.
D)  The issuance of a stock dividend.E) B) and C)
F) B) and D)

Question 11

Assuming the decrease in accrued expenses during fiscal year 2012 included a $14,000 reduction due to interest on debt, compute the interest expense (net) for Kinney in that year.

Accepted Answer

The reduction in accrued expenses is act...

Question 12

Cost of goods sold as reported in the income statement will be less than cash paid to suppliers if:

Accepted Answer

A)  The increase in accounts payable is greater than the increase in inventory during the period.
B)  The decrease in accounts payable is equal to the increase in inventory during the period.
C)  The decrease in accounts payable is less than the decrease in inventory during the period.
D)  The increase in accounts payable is equal to the decrease in inventory during the period.E) A) and B)
F) A) and C)

Question 13

Which of the following would be an example of an investing activity on a statement of cash flows?

Accepted Answer

A)  Sale of equipment.
B)  Issuance of long-term bonds.
C)  Receipt of investment revenue.
D)  Conversion of a cash equivalent into cash.E) B) and C)
F) A) and D)

Question 14

Interest payments on debt are classified as cash outflows from financing activities.

Accepted Answer

A) True 
 B)False

Question 15

In using a spreadsheet to prepare the statement of cash flows, the summary entries duplicate the actual journal entries used to record the transactions during the year.

Accepted Answer

A) True 
 B)False

Question 16

All of the following may qualify as cash equivalents except:

Accepted Answer

A)  Money market accounts.
B)  Certificates of deposit.
C)  U.S.Treasury bills.
D)  Newly issued corporate bonds.E) B) and C)
F) None of the above

Question 17

During 2013, T Company engaged in the following activities:  In T's statement of cash flows, what were net cash outflows from financing activities for 2013?

Accepted Answer

A)  $392.
B)  $440.
C)  $560.
D)  $732.E) A) and B)
F) A) and C)

Question 18

Do the statement of cash flows and its related disclosure note report only transactions that cause an increase or decrease in cash? Explain.

Accepted Answer

A statement of cash flows reports transa...

Question 19

Using the direct method, cash received from customers is calculated as sales:

Accepted Answer

A)  On account.
B)  On account plus cash sales.
C)  Plus an increase in accounts receivable.
D)  Plus a decrease in accounts receivable.E) A) and D)
F) A) and C)

Question 20

The accounting records of Unlucky Company provided the data below.  Required:
Prepare a reconciliation of net income to net cash flows from operating activities.

Accepted Answer

The answer of The accounting records of Unlucky Company provided...

Exam 21: The Statement of Cash Flows Revisited

During 2013, T Company engaged in the following activities: In T's statement of cash flows, what were net cash outflows from financing activities for 2013?

Correct Answer
verified

The accounting records of Unlucky Company provided the data below. Required: Prepare a reconciliation of net income to net cash flows from operating activities.

Correct Answer
verified

Correct Answer
verified

Which of the following is reported as an operating activity in the statement of cash flows?

Correct Answer
verified

Cost of goods sold as reported in the income statement will be less than cash paid to suppliers if:

Correct Answer
verified

The sale of stock and the sale of bonds are reported as financing activities. Are payments of dividends to shareholders and payments of interest to bondholders also reported as financing activities? Explain.

Correct Answer
verified
The payment of cash dividends to shareho...
View Answer

A decrease in cash dividends payable means that dividends declared were less than dividends paid.

Correct Answer
verified

Using the direct method, cash received from customers is calculated as sales:

Correct Answer
verified

Cash paid to suppliers under the direct method is computed as:

Correct Answer
verified

Which of the following financial statements is prepared as of a particular point in time rather than for a period of time?

Correct Answer
verified

All of the following may qualify as cash equivalents except:

Correct Answer
verified

Do the statement of cash flows and its related disclosure note report only transactions that cause an increase or decrease in cash? Explain.

Correct Answer
verified
A statement of cash flows reports transa...
View Answer

In its 2013 income statement, WME reported $695,000 for service revenue earned from membership fees. WME received $681,000 cash in advance from members during 2013. In its reconciliation schedule, WME should:

Correct Answer
verified

Interest payments on debt are classified as cash outflows from financing activities.

Correct Answer
verified

On June 4, White Corporation issued $400 million of bonds for $386 million. During the same year, $1 million of the bond discount was amortized. In a statement of cash flows prepared by the indirect method, White Corporation should report:

Correct Answer
verified

Which of the following would be an example of an investing activity on a statement of cash flows?

Correct Answer
verified

Assuming the decrease in accrued expenses during fiscal year 2012 included a $14,000 reduction due to interest on debt, compute the interest expense (net) for Kinney in that year.

Correct Answer
verified
The reduction in accrued expenses is act...
View Answer

Correct Answer
verified

In using a spreadsheet to prepare the statement of cash flows, the summary entries duplicate the actual journal entries used to record the transactions during the year.

Correct Answer
verified

Which of the following is not an inflow of cash?

Correct Answer
verified

Exam 21: The Statement of Cash Flows Revisited

During 2013, T Company engaged in the following activities: In T's statement of cash flows, what were net cash outflows from financing activities for 2013?

Correct AnswerverifiedShow Answer

The accounting records of Unlucky Company provided the data below. Required: Prepare a reconciliation of net income to net cash flows from operating activities.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is reported as an operating activity in the statement of cash flows?

Correct AnswerverifiedShow Answer

Cost of goods sold as reported in the income statement will be less than cash paid to suppliers if:

Correct AnswerverifiedShow Answer

The sale of stock and the sale of bonds are reported as financing activities. Are payments of dividends to shareholders and payments of interest to bondholders also reported as financing activities? Explain.

Correct AnswerverifiedThe payment of cash dividends to shareho...View AnswerShow Answer

A decrease in cash dividends payable means that dividends declared were less than dividends paid.

Correct AnswerverifiedShow Answer

Using the direct method, cash received from customers is calculated as sales:

Correct AnswerverifiedShow Answer

Cash paid to suppliers under the direct method is computed as:

Correct AnswerverifiedShow Answer

Which of the following financial statements is prepared as of a particular point in time rather than for a period of time?

Correct AnswerverifiedShow Answer

All of the following may qualify as cash equivalents except:

Correct AnswerverifiedShow Answer

Do the statement of cash flows and its related disclosure note report only transactions that cause an increase or decrease in cash? Explain.

Correct AnswerverifiedA statement of cash flows reports transa...View AnswerShow Answer

In its 2013 income statement, WME reported $695,000 for service revenue earned from membership fees. WME received $681,000 cash in advance from members during 2013. In its reconciliation schedule, WME should:

Correct AnswerverifiedShow Answer

Interest payments on debt are classified as cash outflows from financing activities.

Correct AnswerverifiedShow Answer

On June 4, White Corporation issued $400 million of bonds for $386 million. During the same year, $1 million of the bond discount was amortized. In a statement of cash flows prepared by the indirect method, White Corporation should report:

Correct AnswerverifiedShow Answer

Which of the following would be an example of an investing activity on a statement of cash flows?

Correct AnswerverifiedShow Answer

Assuming the decrease in accrued expenses during fiscal year 2012 included a $14,000 reduction due to interest on debt, compute the interest expense (net) for Kinney in that year.

Correct AnswerverifiedThe reduction in accrued expenses is act...View AnswerShow Answer

Correct AnswerverifiedShow Answer

In using a spreadsheet to prepare the statement of cash flows, the summary entries duplicate the actual journal entries used to record the transactions during the year.

Correct AnswerverifiedShow Answer

Which of the following is not an inflow of cash?

Correct AnswerverifiedShow 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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The payment of cash dividends to shareho...
View 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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Correct Answer
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Correct Answer
verified
A statement of cash flows reports transa...
View Answer

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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The reduction in accrued expenses is act...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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