Question 1

All major financing and investing activities affect cash.

Accepted Answer

A) True 
 B)False

Question 2

The adjusted trial balance is the only item needed to prepare the Statement of Cash Flows.

Accepted Answer

A) True 
 B)False

Question 3

Using the indirect method, an increase in accounts receivable during a period is deducted
from net income in calculating cash provided by operations.

Accepted Answer

A) True 
 B)False

Question 4

Operating expenses + an increase in prepaid expenses - a decrease in accrued expenses payable = cash payments for operating expenses.

Accepted Answer

A) True 
 B)False

Question 5

Noncash investing and financing activities must be reported in the body of a statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 6

During 2020, Blaine Company sold a building with a book value of $145,000 for proceeds of $175,000.The company also sold long-term investments for proceeds of $32,000.The company purchased land and a new building for $320,000 by signing a long-term note payable.No other transactions impacted long-term asset accounts during 2020.
Instructions
Compute net cash flows from investing activities.

Accepted Answer

The answer of During 2020, Blaine Company sold a building...

Question 7

Cash receipts from interest and dividends are classified as

Accepted Answer

A)  financing activities.
B)  investing activities.
C)  operating activities.
D)  either financing or investing activities.E) A) and B)
F) A) and C)

Question 8

Which of the following steps is not required in preparing the statement of cash flows?

Accepted Answer

A)  Determine the net change in cash.
B)  Determine the net cash provided by operating activities.
C)  Determine cash from investing and financing activities.
D)  Determine the change in current assets.E) C) and D)
F) B) and C)

Question 9

Using the indirect method, patent amortization expense for the period

Accepted Answer

A)  is deducted from net income.
B)  causes cash to increase.
C)  causes cash to decrease.
D)  is added to net income.E) All of the above
F) None of the above

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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) A) and C)
F) A) and D)

Question 12

The category that is generally considered to be the best measure of a company's ability to continue as a going concern is

Accepted Answer

A)  cash flows from operating activities.
B)  cash flows from investing activities.
C)  cash flows from financing activities.
D)  usually different from year to year.E) A) and D)
F) None of the above

Question 13

The statement of cash flows

Accepted Answer

A)  is prepared instead of an income statement under generally accepted accounting principles.
B)  is used to assess an entity's ability to pay dividends and meet obligations.
C)  is prepared from comparative income statements.
D)  reflects earnings per share figures on a cash basis and on an accrual basis in the body of the statement.E) All of the above
F) A) and B)

Question 14

The statement of cash flows will not report the

Accepted Answer

A)  amount of checks outstanding at the end of the period.
B)  sources of cash in the current period.
C)  uses of cash in the current period.
D)  change in the cash balance for the current period.E) A) and B)
F) A) and C)

Question 15

The change in cash is equal to the change in liabilities less the change in equity plus the change in noncash assets.

Accepted Answer

A) True 
 B)False

Question 16

Financial statement readers can determine future investing and financing transactions by
examining a company's statement of cash flows.

Accepted Answer

A) True 
 B)False

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

Exam 12: Statement of Cash Flows

Correct Answer
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Using the indirect method, an increase in accounts receivable during a period is deducted from net income in calculating cash provided by operations.

Correct Answer
verified

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

Correct Answer
verified

The category that is generally considered to be the best measure of a company's ability to continue as a going concern is

Correct Answer
verified

Operating expenses + an increase in prepaid expenses - a decrease in accrued expenses payable = cash payments for operating expenses.

Correct Answer
verified

Which of the following steps is not required in preparing the statement of cash flows?

Correct Answer
verified

The adjusted trial balance is the only item needed to prepare the Statement of Cash Flows.

Correct Answer
verified

Noncash investing and financing activities must be reported in the body of a statement of cash flows.

Correct Answer
verified

The statement of cash flows will not report the

Correct Answer
verified

Cash receipts from interest and dividends are classified as

Correct Answer
verified

The change in cash is equal to the change in liabilities less the change in equity plus the change in noncash assets.

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

The statement of cash flows

Correct Answer
verified

Using the indirect method, patent amortization expense for the period

Correct Answer
verified

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

Correct Answer
verified

All major financing and investing activities affect cash.

Correct Answer
verified

Financial statement readers can determine future investing and financing transactions by examining a company's statement of cash flows.

Correct Answer
verified

Exam 12: Statement of Cash Flows

Correct AnswerverifiedShow Answer

Using the indirect method, an increase in accounts receivable during a period is deducted from net income in calculating cash provided by operations.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The category that is generally considered to be the best measure of a company's ability to continue as a going concern is

Correct AnswerverifiedShow Answer

Operating expenses + an increase in prepaid expenses - a decrease in accrued expenses payable = cash payments for operating expenses.

Correct AnswerverifiedShow Answer

Which of the following steps is not required in preparing the statement of cash flows?

Correct AnswerverifiedShow Answer

The adjusted trial balance is the only item needed to prepare the Statement of Cash Flows.

Correct AnswerverifiedShow Answer

Noncash investing and financing activities must be reported in the body of a statement of cash flows.

Correct AnswerverifiedShow Answer

The statement of cash flows will not report the

Correct AnswerverifiedShow Answer

Cash receipts from interest and dividends are classified as

Correct AnswerverifiedShow Answer

The change in cash is equal to the change in liabilities less the change in equity plus the change in noncash assets.

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

The statement of cash flows

Correct AnswerverifiedShow Answer

Using the indirect method, patent amortization expense for the period

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

All major financing and investing activities affect cash.

Correct AnswerverifiedShow Answer

Financial statement readers can determine future investing and financing transactions by examining a company's statement of cash flows.

Correct AnswerverifiedShow Answer

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