Question 1

The net cash flow from operating activities is an inflow of $37,042,the net cash flow from investing activities is an outflow of $16,831,and the net cash flow from financing activities is an outflow of $26,397.If the beginning cash account balance is $11,283,what is the ending cash account balance?

Accepted Answer

A)  $5,097
B)  ($6,186) 
C)  $38,759
D)  $27,476E) A) and D)
F) A) and C)

Question 2

Suppose a company generally records revenues and expenses before receiving or making cash payments.Which of the following statements is then true?

Accepted Answer

A)  If sales are falling,net losses could occur even though the company reports net cash inflows from operating activities.
B)  If sales are rising,net profits could occur even though the company reports net cash outflows from operating activities.
C)  Net income and cash flows will not always agree because revenues and expenses can be recorded in different time periods than their related cash flows.
D)  All of the above.E) B) and D)
F) A) and B)

Question 3

The company would report a net cash inflow (outflow) from investing activities of:

Accepted Answer

A)  $1,000
B)  $2,000
C)  $5,000
D)  $7,000E) B) and D)
F) None of the above

Question 4

Which of the following are used to determine cash flows from financing activities?

Accepted Answer

A)  Short-term debt,accrued liabilities,contributed capital,and notes payable.
B)  Short-term debt,long-term debt,contributed capital,and retained earnings.
C)  Short-term debt,accrued liabilities,retained earnings,and bonds payable.
D)  Long-term debt,notes payable,interest expense,and bonds payable.E) C) and D)
F) All of the above

Question 5

An outdoor water park in Quebec with a calendar year-end is likely to have:

Accepted Answer

A)  unpredictable fluctuations in cash flow from quarter to quarter.
B)  the largest cash inflow from operations in the second and third quarters (April - September) .
C)  a fairly stable cash flow across all four quarters.
D)  the largest cash inflow from operations in the fourth and first quarters (October - March) .E) None of the above
F) All of the above

Question 6

Sales revenue was $171,356 and cash collected from customers was $167,803.Which of the following would be consistent with this difference?

Accepted Answer

A)  Accounts receivable could have decreased.
B)  Cash payments could have been larger than the expense accounts.
C)  Accounts receivable could have increased.
D)  Cash payments could have been smaller than the expense accounts.E) A) and B)
F) C) and D)

Question 7

The quality of income ratio measures:

Accepted Answer

A)  how much of net income came from financing activities.
B)  the proportion of net income that is likely to be collected over time.
C)  how much of gross income the company was able to shield from taxes.
D)  the portion of net income that is generated by cash from operating activities.E) A) and B)
F) A) and C)

Question 8

When a company uses the direct method to determine the net cash flow from operating activities,cash flows from operating activities will:

Accepted Answer

A)  be identical to the amount reported using the indirect method.
B)  be larger if there is a net cash inflow and smaller if there is a net cash outflow compared to the amount reported using the indirect method.
C)  always be larger than the amount reported using the indirect method.
D)  be larger if there is a net cash outflow and smaller if there is a net cash inflow compared to the amount reported using the indirect method.E) A) and B)
F) A) and C)

Question 9

When the cash flows from operating,investing,and financing activities are combined to give net cash flow for the period,a net decrease in cash is subtracted from the beginning cash to calculate the ending cash balance.
BT: Comprehension

Accepted Answer

A) True 
 B)False

Question 10

When using the spreadsheet approach for preparing a Statement of Cash Flows using the indirect method,one half of the spreadsheet reflects changes in balance sheet accounts and the other half is used to demonstrate their effect on cash flows.
BT: Knowledge

Accepted Answer

A) True 
 B)False

Question 11

Additional Cash flows from operations leftover after paying for replacement of existing plant,property and equipment and dividends to shareholders are:

Accepted Answer

A)  Cash flows from investing.
B)  Free cash flows.
C)  Cash flows from financing activities.
D)  Cash flows from investing activities.E) A) and B)
F) C) and D)

Question 12

What is the first step in identifying cash flows from operations when the indirect method is used?

Accepted Answer

A)  Find net income from the balance sheet.
B)  Calculate the net change in the cash account.
C)  Add the change in accounts receivable to sales revenue.
D)  Identify the balance sheet accounts that relate to operating activities.E) A) and B)
F) B) and C)

Question 13

A company's amortization expense is $15,000.Its beginning inventory balance is $134,000 and ending balance for the year is $145,000 respectively.What is the cash paid for depreciation:

Accepted Answer

A)  $0
B)  $15,000
C)  $11,000
D)  $26,000E) None of the above
F) B) and D)

Question 14

When calculating net cash flow from financing activities,a company must convert interest expense to cash payments for interest.
BT: Comprehension

Accepted Answer

A) True 
 B)False

Question 15

When a company issues shares,it reports a cash inflow from financing activities; when it repurchases shares,it reports a cash outflow for financing activities.
BT: Comprehension

Accepted Answer

A) True 
 B)False

Question 16

Purchase of equipment is an financing activity.
BT: Knowledge

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements is true regarding cash flows from financing activities?

Accepted Answer

A)  When companies borrow,cash outflows for financing activities have occurred.
B)  When companies receive dividends,cash inflows from financing activities have occurred.
C)  When companies repurchase their own stock,cash outflows for financing activities have occurred.
D)  When companies pay dividends,cash inflows from financing activities have occurred.E) B) and C)
F) C) and D)

Question 18

A company bought $250,000 of equipment with an expected life of ten years and no salvage value.After six years the company sold the equipment for $94,000.If it uses straight-line amortization and the indirect method is used to determine net cash flows from operating activities,which of the following reflects the way the sale of the equipment would be reported in the statement of cash flows?

Accepted Answer

A)  $94,000 is recorded as a cash inflow from investing activities and no other sections of the statement are affected.
B)  $94,000 is recorded as a cash inflow from investing activities and $6,000 is added to convert net income to net cash flow from operating activities.
C)  $94,000 is recorded as a cash inflow from investing activities and $6,000 is subtracted to convert net income to net cash flow from operating activities.
D)  $94,000 is recorded as a cash inflow from operating activities.E) None of the above
F) B) and C)

Question 19

For each letter in the T-accounts below,calculate the missing amount and explain (in words)what each item represents.
 $\begin{array}{cc}\text {Accounts Receivable }\\hline
\begin{array}{ll|l}
\text { Jan. } 1&313\&2,573&A\\hline\text { Dee. } 31&295\\hline
\end{array}
\end{array}\quad\quad$$\begin{array}{cc}\text { Prepaid Insurance }\\hline
\begin{array}{ll|l}
\text { Jan } 1&25\&B&42\\hline\text { Dec. } 31&26\\hline
\end{array}
\end{array}\quad\quad$$\begin{array}{cc}\text { Unearned Revenue }\\hline
\begin{array}{ll|l}
&&240&\text { Jan }\315&&C\\hline
&&253&\text { Dec. }\\hline
\end{array}
\end{array}$

Accepted Answer

The answer of For each letter in the T-accounts below,calculate...

Question 20

Cash and cash equivalents include:

Accepted Answer

A)  assets that have stable long-term value.
B)  assets that are short-term and highly liquid and have an original maturity of less than three months.
C)  assets that consistently grow in value over the long run.
D)  all of the above.E) C) and D)
F) All of the above

Exam 12: Statement Cash Flows

When calculating net cash flow from financing activities,a company must convert interest expense to cash payments for interest. BT: Comprehension

Correct Answer
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Additional Cash flows from operations leftover after paying for replacement of existing plant,property and equipment and dividends to shareholders are:

Correct Answer
verified

Sales revenue was $171,356 and cash collected from customers was $167,803.Which of the following would be consistent with this difference?

Correct Answer
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What is the first step in identifying cash flows from operations when the indirect method is used?

Correct Answer
verified

Which of the following statements is true regarding cash flows from financing activities?

Correct Answer
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Which of the following are used to determine cash flows from financing activities?

Correct Answer
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A company's amortization expense is $15,000.Its beginning inventory balance is $134,000 and ending balance for the year is $145,000 respectively.What is the cash paid for depreciation:

Correct Answer
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The net cash flow from operating activities is an inflow of $37,042,the net cash flow from investing activities is an outflow of $16,831,and the net cash flow from financing activities is an outflow of $26,397.If the beginning cash account balance is $11,283,what is the ending cash account balance?

Correct Answer
verified

Suppose a company generally records revenues and expenses before receiving or making cash payments.Which of the following statements is then true?

Correct Answer
verified

When a company issues shares,it reports a cash inflow from financing activities; when it repurchases shares,it reports a cash outflow for financing activities. BT: Comprehension

Correct Answer
verified

When using the spreadsheet approach for preparing a Statement of Cash Flows using the indirect method,one half of the spreadsheet reflects changes in balance sheet accounts and the other half is used to demonstrate their effect on cash flows. BT: Knowledge

Correct Answer
verified

Cash and cash equivalents include:

Correct Answer
verified

An outdoor water park in Quebec with a calendar year-end is likely to have:

Correct Answer
verified

When the cash flows from operating,investing,and financing activities are combined to give net cash flow for the period,a net decrease in cash is subtracted from the beginning cash to calculate the ending cash balance. BT: Comprehension

Correct Answer
verified

Purchase of equipment is an financing activity. BT: Knowledge

Correct Answer
verified

When a company uses the direct method to determine the net cash flow from operating activities,cash flows from operating activities will:

Correct Answer
verified

Correct Answer
verified

The company would report a net cash inflow (outflow) from investing activities of:

Correct Answer
verified

Correct Answer
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The quality of income ratio measures:

Correct Answer
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Exam 12: Statement Cash Flows

When calculating net cash flow from financing activities,a company must convert interest expense to cash payments for interest. BT: Comprehension

Correct AnswerverifiedShow Answer

Additional Cash flows from operations leftover after paying for replacement of existing plant,property and equipment and dividends to shareholders are:

Correct AnswerverifiedShow Answer

Sales revenue was $171,356 and cash collected from customers was $167,803.Which of the following would be consistent with this difference?

Correct AnswerverifiedShow Answer

What is the first step in identifying cash flows from operations when the indirect method is used?

Correct AnswerverifiedShow Answer

Which of the following statements is true regarding cash flows from financing activities?

Correct AnswerverifiedShow Answer

Which of the following are used to determine cash flows from financing activities?

Correct AnswerverifiedShow Answer

A company's amortization expense is $15,000.Its beginning inventory balance is $134,000 and ending balance for the year is $145,000 respectively.What is the cash paid for depreciation:

Correct AnswerverifiedShow Answer

The net cash flow from operating activities is an inflow of $37,042,the net cash flow from investing activities is an outflow of $16,831,and the net cash flow from financing activities is an outflow of $26,397.If the beginning cash account balance is $11,283,what is the ending cash account balance?

Correct AnswerverifiedShow Answer

Suppose a company generally records revenues and expenses before receiving or making cash payments.Which of the following statements is then true?

Correct AnswerverifiedShow Answer

When a company issues shares,it reports a cash inflow from financing activities; when it repurchases shares,it reports a cash outflow for financing activities. BT: Comprehension

Correct AnswerverifiedShow Answer

When using the spreadsheet approach for preparing a Statement of Cash Flows using the indirect method,one half of the spreadsheet reflects changes in balance sheet accounts and the other half is used to demonstrate their effect on cash flows. BT: Knowledge

Correct AnswerverifiedShow Answer

Cash and cash equivalents include:

Correct AnswerverifiedShow Answer

An outdoor water park in Quebec with a calendar year-end is likely to have:

Correct AnswerverifiedShow Answer

When the cash flows from operating,investing,and financing activities are combined to give net cash flow for the period,a net decrease in cash is subtracted from the beginning cash to calculate the ending cash balance. BT: Comprehension

Correct AnswerverifiedShow Answer

Purchase of equipment is an financing activity. BT: Knowledge

Correct AnswerverifiedShow Answer

When a company uses the direct method to determine the net cash flow from operating activities,cash flows from operating activities will:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The company would report a net cash inflow (outflow) from investing activities of:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The quality of income ratio measures:

Correct AnswerverifiedShow Answer

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