Question 1

The purchase of treasury stock is treated as a cash outflow in the------------ section of the statement of cash flows.

Accepted Answer

financing ...

Question 2

When a firm issues a long-term note payable, the amount that it receives for the note is considered a cash inflow from financing activities.

Accepted Answer

A) True 
 B)False

Question 3

The cash received from issuing common stock is not reported on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 4

Anders Inc, reported that its bonds with a par value of $500,000 and a carrying value of $545,000 were retired for $525,000 resulting in a gain of $20,000. The amounts to be reported on the statement of cash flows include:

Accepted Answer

A)  a $45,000 decrease in cash for financing activities
B)  a $525,000 decrease in cash for investing activities and a $45,000 increase in financing activities.
C)  a $20,000 decrease in cash from operating activities and a $525,000 decrease in cash for financing activities.
D)  $20,000 increase in cash from operating activities and a $545,000 decrease in cash used for financing activities.E) A) and C)
F) B) and C)

Question 5

Cannon Manufacturing Co. sold equipment that cost $18,000 for $5,000. A gain on sale of $1,000 was recorded. How is the Cash Flows from Investing Activities affected?

Accepted Answer

A)  A cash inflow of $5,000 is recorded.
B)  A cash inflow of $6,000 is recorded.
C)  A cash inflow of $11,000 is recorded.
D)  A cash inflow of $12,000 is recorded.E) None of the above
F) A) and C)

Question 6

On a statement of cash flows, depreciation expense is:

Accepted Answer

A)  subtracted from net income in the computation of the net cash provided by operating activities.
B)  added to net income in the computation of the net cash provided by operating activities.
C)  treated as a cash outflow in the computation of the net cash used in investing activities.
D)  treated as a cash inflow in the computation of the net cash used in investing activities.E) All of the above
F) C) and D)

Question 7

A decrease in current liabilities is:

Accepted Answer

A)  a source of cash under operating activities.
B)  not reported on the statement of cash flows.
C)  a use of cash under operating activities.
D)  a use of cash under investing activities.E) A) and C)
F) C) and D)

Question 8

Corporations do not commonly use the direct method for the Statement of Cash Flows because

Accepted Answer

A)  of the many additional disclosures and schedules that must accompany the statement.
B)  the FASB prefers the indirect method.
C)  the direct method does not follow GAAP.
D)  there are fewer disclosures required under the indirect method.E) C) and D)
F) All of the above

Question 9

If the income statement reports a net loss for the year, the loss is not reported in the operating activities section of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 10

A list of sources and uses of cash are given below. Indicate on the line provided whether each is an (O) operating, (I) investing, (F) financing, or a significant (N) noncash financing and investing activity.
-declared dividend

Accepted Answer

A)  (O) operating
B)  (I) investing
C)  (F) financing, or a significant
D)  (N) noncash financing and investing activity.E) B) and D)
F) C) and D)

Question 11

Generally, if a short-term investment is to be classified as a cash equivalent,:

Accepted Answer

A)  1 month from the date it was acquired.
B)  3 months from the date it was acquired.
C)  6 months from the date it was acquired.
D)  12 months from the date it was acquired.E) C) and D)
F) A) and B)

Question 12

Use the following information .
The Kerfuffle Company Income Statement
For the Year Ended June 30, 2019
  General and Administrative Expenses
    Liabilities and Stockholders' Equity
  Additional information:
Plant assets that originally cost $67,200 were sold for $56,400, resulting in a gain of $8,200. Dividends of $35,815 were declared and paid in 2019. There were no dividends declared in 2018.
-Using the information provided, prepare the cash flows from operating activities for The Kerfuffle Company using the indirect method.

Accepted Answer

Cash Flows...

Question 13

For each of the following operating activities, select whether it is a source of cash, a use of cash or neither under the indirect method.
-increase in Prepaid Expense

Accepted Answer

A)  source
B)  use
C)  neitherD) A) and B)
E) A) and C)

Question 14

For each of the following operating activities, select whether it is a source of cash, a use of cash or neither under the indirect method.
-increase in Accounts Receivable

Accepted Answer

A)  source
B)  use
C)  neitherD) A) and B)
E) A) and C)

Exam 24: The Statement of Cash Flows

The purchase of treasury stock is treated as a cash outflow in the------------ section of the statement of cash flows.

Correct Answer
verified
financing ...
View Answer

If the income statement reports a net loss for the year, the loss is not reported in the operating activities section of the statement of cash flows.

Correct Answer
verified

Correct Answer
verified
Cash Flows...
View Answer

For each of the following operating activities, select whether it is a source of cash, a use of cash or neither under the indirect method. -increase in Prepaid Expense

Correct Answer
verified

Anders Inc, reported that its bonds with a par value of $500,000 and a carrying value of $545,000 were retired for $525,000 resulting in a gain of $20,000. The amounts to be reported on the statement of cash flows include:

Correct Answer
verified

Generally, if a short-term investment is to be classified as a cash equivalent,:

Correct Answer
verified

On a statement of cash flows, depreciation expense is:

Correct Answer
verified

Cannon Manufacturing Co. sold equipment that cost $18,000 for $5,000. A gain on sale of $1,000 was recorded. How is the Cash Flows from Investing Activities affected?

Correct Answer
verified

When a firm issues a long-term note payable, the amount that it receives for the note is considered a cash inflow from financing activities.

Correct Answer
verified

For each of the following operating activities, select whether it is a source of cash, a use of cash or neither under the indirect method. -increase in Accounts Receivable

Correct Answer
verified

Corporations do not commonly use the direct method for the Statement of Cash Flows because

Correct Answer
verified

The cash received from issuing common stock is not reported on the statement of cash flows.

Correct Answer
verified

A list of sources and uses of cash are given below. Indicate on the line provided whether each is an (O) operating, (I) investing, (F) financing, or a significant (N) noncash financing and investing activity. -declared dividend

Correct Answer
verified

A decrease in current liabilities is:

Correct Answer
verified

Exam 24: The Statement of Cash Flows

The purchase of treasury stock is treated as a cash outflow in the------------ section of the statement of cash flows.

Correct Answerverifiedfinancing ...View AnswerShow Answer

If the income statement reports a net loss for the year, the loss is not reported in the operating activities section of the statement of cash flows.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedCash Flows...View AnswerShow Answer

For each of the following operating activities, select whether it is a source of cash, a use of cash or neither under the indirect method. -increase in Prepaid Expense

Correct AnswerverifiedShow Answer

Anders Inc, reported that its bonds with a par value of $500,000 and a carrying value of $545,000 were retired for $525,000 resulting in a gain of $20,000. The amounts to be reported on the statement of cash flows include:

Correct AnswerverifiedShow Answer

Generally, if a short-term investment is to be classified as a cash equivalent,:

Correct AnswerverifiedShow Answer

On a statement of cash flows, depreciation expense is:

Correct AnswerverifiedShow Answer

Cannon Manufacturing Co. sold equipment that cost $18,000 for $5,000. A gain on sale of $1,000 was recorded. How is the Cash Flows from Investing Activities affected?

Correct AnswerverifiedShow Answer

When a firm issues a long-term note payable, the amount that it receives for the note is considered a cash inflow from financing activities.

Correct AnswerverifiedShow Answer

For each of the following operating activities, select whether it is a source of cash, a use of cash or neither under the indirect method. -increase in Accounts Receivable

Correct AnswerverifiedShow Answer

Corporations do not commonly use the direct method for the Statement of Cash Flows because

Correct AnswerverifiedShow Answer

The cash received from issuing common stock is not reported on the statement of cash flows.

Correct AnswerverifiedShow Answer

A list of sources and uses of cash are given below. Indicate on the line provided whether each is an (O) operating, (I) investing, (F) financing, or a significant (N) noncash financing and investing activity. -declared dividend

Correct AnswerverifiedShow Answer

A decrease in current liabilities is:

Correct AnswerverifiedShow Answer

Correct Answer
verified
financing ...
View Answer

Correct Answer
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Correct Answer
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Cash Flows...
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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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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