ACCT 211 Read & Interact Chapter 12 Reporting Cash Flows solutions complete answers

ACCT 211 Read & Interact Chapter 12 Reporting Cash Flows solutions complete answers 

 

Reid Company pays for insurance policies in advance, recording the expenditure to Prepaid Insurance. The balance in the prepaid insurance account at the beginning and end of the year was $1,000 and $1,200, respectively. Insurance expense during this period totaled $10,000. Using this information, what is the total cash paid for insurance during the period?

 

When creating a statement of cash flows using the direct method, loss on sale of assets is:

 

Sheldon Company pays for insurance policies in advance, recording the expenditure to Prepaid Insurance. The balance in the prepaid insurance account at the beginning and end of the year was $2,500 and $1,000, respectively. Insurance expense during this period totaled $10,000. Using this information, what is the total cash paid for insurance during the period?

 

Income taxes expense reported on the income statement was $2,500. The beginning balance in Income Taxes Payable was $1,000 and the ending balance was $1,500. Cash paid for taxes during the period is equal to:

 

The income statement shows Wages Expense of $4,000 for the period. The balance sheet indicates that Wages Payable at the beginning of the year had a balance of $300 and at the end of the year had a balance of $500. Cash paid for wages equals:

 

Accounts receivable had a debit balance of $4,000 at the beginning of the period, and a debit balance of $6,000 at the end of the period. Credit sales for the period totaled $22,000. Using this information, cash receipts for the period totaled:

 

Inventory at the beginning of the period had a debit balance of $7,000, and a debit balance of $10,000 at the end of the period. Cost of goods sold for the period totaled $45,000. Using this information, purchases for the period must have totaled:

 

Which of the following items would not be considered an operating cash payment under the direct method of reporting the statement of cash flows?

 

Interest expense reported on the income statement was $1,000. The beginning balance in Interest Payable was $150 and the ending balance was $50. Cash paid for interest during the period is equal to:

 

The prepaid expenses account had a beginning balance of $6,000 and an ending balance of $8,000. Wages and other operating expenses for the period equaled $20,000. Based on this information, cash payments during the period equal $ .

 

Which of the following items could be "other cash receipts"? (Check all that apply.)

 

To compute cash received from customers under the direct method, the   account is adjusted for the decrease or increase in accounts receivable.

 

Inventory at the beginning of the period had a debit balance of $9,000, and a debit balance of $10,000 at the end of the period. Cost of goods sold for the period totaled $40,000. Using this information, purchases for the period must have totaled:

 

The __________ helps measure a company's ability to meet its obligations, pay dividends, expand operations, and obtain financing. It is computed by taking cash flow from operations divided by average total assets.

 

Under the direct method, operating expenses includes all of the following except:

 

Beginning accounts receivable were $20,000 and ending accounts receivable were $25,000. If sales were $150,000, cash receipts equal $ .

 

If rent receivable decreases during the period, cash received from renters is _____ rent revenue reported on the income statement.

 

True or false: The direct method of reporting operating cash flows begins with revenue and adjusts for changes in related balance sheet accounts.

 

Accounts receivable had a debit balance of $4,000 at the beginning of the period, and a debit balance of $3,000 at the end of the period. Credit sales for the period totaled $22,000. Using this information, cash receipts for the period totaled:

 

MRC Company reports the following information for the current year: total assets of $65,000 and total cash provided from operations of $20,000; For the previous year: total assets of $75,000 and cash provided from operations of $5,000. Cash flow on total assets for the current year is (round to the nearest tenth):

 

Retained earnings at the beginning and end of the year totaled $25,000 and $75,000, respectively. Net income reported during the period was $70,000. Using this information, dividends paid will be reported as _____ on the statement of cash flows.

 

The three-step process to determine cash provided or used by financing activities includes all of the following steps except:

 

Dividends paid during a period totaled $5,000. This will be reported on the statement of cash flows as:

 

A company repaid a long-term debt during the year. They will report this as a(n) (increase/decrease)  in the   activities section on the statement of cash flows.

 

The TeaCup Company reported an increase to net income in their income taxes payable account on the statement of cash flows using the indirect method. This means that TeaCup's income taxes payable account (increased/decreased)  for the period.

 

Emerald Jewelery Store had a credit balance in interest payable of $200 at the beginning of the period, and a credit balance of $50 at the end of the period. Based on this information, the adjustment to net income for the period will be reported as:

 

Sunshine Company had a credit balance of $4,000 in accounts payable at the beginning of the period, and a credit balance of $6,000 at the end of the period. Based on this information, the adjustment to net income for the period will be reported as:

 

The Breezy Fan reported a decrease to net income in their income taxes payable account on the statement of cash flows using the indirect method. This means that Breezy Fan's income taxes payable account (increased/decreased)  for the period.

 

Reid Company's balance in prepaid insurance at the beginning and end of the year was $1,000 and $1,200, respectively. This will be reported on the statement of cash flows using the indirect method as:

 

The Coffee Cup Company had a credit balance of $500 in interest payable at the beginning of the period, and a credit balance of $600 at the end of the period. Based on this information, the adjustment to net income for the period will be reported as:

 

LiveLife Company had a credit balance of $10,000 in accounts payable at the beginning of the period, and a credit balance of $6,000 at the end of the period. Based on this information, the adjustment to net income for the period will be reported as:

 

Inventory at the beginning of the period had a debit balance of $9,000, and a debit balance of $7,000 at the end of the period. Using the indirect method, this will be reported in the operating section of the statement of cash flows as:

 

Sheldon Company's balance in prepaid insurance at the beginning and end of the year was $2,500 and $1,000, respectively. This will be reported on the statement of cash flows using the indirect method as:

 

Accounts receivable had a debit balance of $10,000 at the beginning of the period, and a debit balance of $6,000 at the end of the period. Based on this information, the adjustment to net income for the period will be reported as:

 

Which of the following items would be subtracted from net income when reporting cash flows from operating activities, using the indirect method? (Check all that apply.)

 

In preparing a cash flows from operating activities using the indirect method, an increase in accounts receivable would be (added/subtracted)   to (from) net income.

 

Inventory at the beginning of the period had a debit balance of $7,000, and a debit balance of $10,000 at the end of the period. Using the indirect method, this will be reported in the operating section of the statement of cash flows as:

 

A gain from the sale of a building would be (added/subtracted)   to (from) net income when computing cash flows from operations, using the indirect method.

 

Which of the following items would not be adjusted to net income when computing cash flows from operating activities, using the indirect method?

 

Accounts receivable had a debit balance of $4,000 at the beginning of the period, and a debit balance of $6,000 at the end of the period. Based on this information, the adjustment to net income for the period will be reported as:

 

Which of the following items would be added to net income when reporting cash flows from operating activities, using the indirect method? (Check all that apply.)

 

Which of the following items would not be a correct adjustment to net income to arrive at cash flows from operating activities, using the indirect method?

 

A loss from the sale of an investment would be (added/subtracted)   to (from) net income when computing cash flows from operations, using the indirect method.

 

Carol Co. prepares a statement of cash flows starting with net income and then adjusting for items that do not affect cash. Carol Co. is using the (direct/indirect)   method of reporting the statement of cash flows.

 

Which of the following items would be adjusted to net income when computing cash flows from operating activities, using the indirect method? (Check all that apply.)

 

The presentation of the _____ section is shown differently depending on if the statement of cash flows is reported using the direct or indirect method.

 

The _______ method of reporting the statement of cash flows reports net income and then adjusts it for items that do not affect cash.

 

In addition to analyzing the cash account, a second approach to preparing the statement of cash flows is to explain changes in cash by analyzing changes in

 

A company's cash receipts and cash payments are recorded in the cash account in its general ledger. Which of the following can be determined by analyzing the cash account? (Check all that apply.)

 

A company reported total assets at the end of the previous year of $95,000; including cash of $35,000, accounts receivable of $20,000, and inventory of $40,000. It reported total assets at the end of the current year of $110,000; including cash of $44,000; accounts receivable of $29,000, and inventory of $37,000. Compute the net increase or decrease in cash for the current year.

 

When analyzing the noncash accounts to assist in preparing the statement of cash flows, the changes in liabilities, equity and noncash asset accounts are analyzed along with the

 

The information needed to prepare a statement of cash flows could come from which of the following sources? (Check all that apply.)

 

A company's cash receipts and cash payments are recorded in the cash account in its general ledger. Identify which of the following could not be determined by analyzing the cash account?

 

At the beginning of the year, Rex Co. showed a debit balance in the cash account of $20,500. Total debits to this account during the year were $45,000, and total credits during the year were $35,000. The net (increase/decrease)   in cash for the year equals $ .

 

Identify which of the following items is a noncash investing and financing activity that must be reported in a note to the statement of cash flows. (Check all that apply.)

 

Current liabilities _____ operations, including short-term notes payable and dividends payable are categorized as financing activities.

 

Which of the following transactions would not be reported under investing activities in the statement of cash flows?

 

Which of the following items would be reported under financing activities on the statement of cash flows? (Select all that apply).

 

Which of the following transactions would be reported under cash flows from operating activities? Select all that apply.

 

Investing activities are affected by

 

Which of the following transactions would be reported under investing activities in the statement of cash flows? (Check all that apply.)

 

A(n) _____________ activity includes those transactions and events that affect net income, including the purchase of goods and services, cash sales to customers, and payment of operating expenses.

 

_________ activities include those transactions and events that affect long-term liabilities and equity, such as obtaining cash from issuing debt and distributing cash to owners.

 

Lakeview, Inc.'s statement of cash flows reports financing activities with payments that exceed receipts. This means that Lakeview had a net cash (inflow/outflow)   from financing activities.

 

_______ activities include those transactions and events such as lending and collecting money for notes receivable and cash receipts from sale of short-term investments.

 

The purchase of goods and services, the sale of goods and services to customers, and costs to operate the business are all reported on the statement of cash flows under   activities.

 

 activities include those transactions and events that affect net income.

 

A net cash ______ occurs when the payments in a category exceed the receipts.

 

True or false: A spreadsheet can help a company prepare a statement of cash flows.

 

Investors assess cash flows before

 

At the beginning of the period, a company reported $100,000 of common stock, $10 par; and $50,000 paid-in capital in excess of par. At the end of the period, this company reported $110,000 of common stock, $10 par; and $90,000 paid-in capital in excess of par. Cash received from the sale of common stock during the year is $      .

 

A company repaid a long-term debt during the year. They will report this as an (increase/decrease)       in the        activities section on the statement of cash flows.

 

The three-step analysis to determine cash provided or used by financing activities includes:

 

Red Co.'s beginning Common Stock balance was $110,000 and their ending Common Stock balance was $125,000. This will be reported as _____ in the statement of cash flows.

 

Starfish Shells had a beginning balance in Notes Payable of $35,000 and an ending balance of $40,000. This will be reported as _____ on the statement of cash flows.

 

The three-stage process to determine cash provided or used by financing activities includes all of the following steps except:

 

Accountants can use a three-step process to determine cash provided (or used) by investing activities. Which of the following steps is not part of this process?

 

Blue Co. sold plant assets costing $15,000 with accumulated depreciation of $10,000 for $7,000. As a result, Blue Co will report _____ on the statement of cash flows in the cash flows from investing activities section.

 

The three-step analysis to determine cash provided or used by investing activities includes:

 

Which of the following is not one of the five important steps to preparing a statement of cash flows?

 

The format of a statement of cash flows includes reporting cash flows from three activities including:

 

Identify which of the following items is not a noncash investing and financing activity that must be reported in a note to the statement of cash flows. (Check all that apply.)

 

The statement of cash flows reports noncash investing and financing transactions in

 

The statement of cash flows does not report the following transactions

 

The statement of cash flows explains the difference between beginning and ending balances of cash and cash equivalents. A cash equivalent must exhibit all of the following criteria, except:

 

Information on the statement of cash flows helps users answer all of the following questions except:

 

A net cash (inflow/outflow)        occurs when the receipts in a category exceed the payments.

 

Cash flows from financing activities identifies cash receipts and cash payments related to which of the following types of accounts?

 

A cash     must satisfy two criteria: (1) be readily convertible to a known amount of cash and (2) be sufficiently close to maturity so its market value is unaffected by interest rate changes.

 

Which of the following transaction would be reported under cash flows from operating activities? Select all that apply.

 

Which of the following items are classified as noncash investing and financing activities?

 

A gain from the sale of a building would be ___ to (from) net income when computing cash flow from operations, using the indirect method.

 

Both the direct and indirect methods of operating activities report which of the following items?

 

_____ activities include those transactions and events that affect long-term liabilities and equity, such as obtaining cash from issuing debt and distributing cash to owners.

 

A(n) ___ occurs when the receipts in a category exceed the payments.

 

Which of the following items would be reported under financing activities on the statement of cash flows?

 

Lakeview Inc.'s statement of cash flows reports financing activities with payments that exceed receipts. This means that Lakeview had a net cash _______ from financing activities.

 

Which of the following would be included in the operating section when preparing the statement of cash flows using the indirect method?

 

The _____ method separately lists each major item of operating cash receipts and each major item of operating cash payments. The cash payments are subtracted from cash receipts to determine the net cash provided (used) by operating activities.

 

In a statement of cash flows, cash received from the sale of a building would be classified under "cash flows from __________ activities.”

 

The _____ method of reporting the statement of cash flows reports net income and then adjusts it for items necessary to obtain net cash provided or used by operating activities.

 

Which of the following items would be added to net income when reporting cash flows from operating activities, using the indirect method?

 

The statement of cash flows explains the difference between beginning and ending balances of cash and cash equivalents. A cash equivalent must satisfy which of the following criteria?

 

Which of the following items would be correct adjustments to net income to arrive at cash flows from operating activities, using the indirect method?

 

An increase in wages payable would be     to (from) net income, when computing cash flows from operations, using the indirect method.

 

A(n)     activity includes those transactions and events that determine net income, including the purchase of merchandise, the sale of goods and services to customers, and expenditures to operate the business.

 

Information on the statement of cash flows helps us answer all of the following questions except:

 

Cash flows from financing activities identifies cash receipts and payments related to which of the following types of accounts?

 

At the beginning of 2018, Rex Co. showed a debit balance in the cash account of $20,500. Total debits to this account during the year were $45,000, and total credits during the year were $35,000. The net ______ in cash for 2018 equals $_____________.

 

There are five important steps to preparing a statement of cash flows. Rank the steps in order from first to last.

 

Collecting money for notes receivable would be reported on the statement of cash flows as a(n) ___________ activity.

 

Which of the following transactions would not be classified as an operating activity on the statement of cash flows?

 

Which of the following items would be adjusted to net income when computing cash flows from operating activities, using the indirect method?

 

1.
______ activities include those transactions and events that affect long-term assets, such as lending and collecting money for notes receivable and cash receipts from sale of long-term plant assets:
 
 
3.
__________ activities include those transactions and events that determine net income:
 
 
4.
Activities that involve the production or purchase of merchandise and the sale of goods and services to customers, including expenditures related to administering the business, are classified as:
 
 
5.
The appropriate section in the statement of cash flows for reporting the receipt of cash dividends from investments in securities is:
 
 
7.
Cash flows provided (used) by operating activities are reported in one of two ways: the __________ method or the __________ method. These two methods apply only to the operating activities section:
 
 
8.
A company reported total assets at the end of 2009 of $95,000; including cash of $35,000, accounts receivable of $20,000, and inventory of $40,000. It reported total assets at the end of 2010 of $110,000; including cash of $44,000; accounting receivable of $29,000, and inventory of $37,000. Compute the net increase or decrease in cash in 2010:
 
 
9.
A company's cash receipts and cash payments are recorded in the cash account in its general ledger. Identify which of the following could not be determined by analyzing the cash account:
 
 
10.
Depreciation expense is (added/subtracted)        to (from) net income, when computing cash flows from operations, using the indirect method.
 
 
12.
Identify which of the following items is not a non-cash investment and financing activity that must be reported in a note to the statement of cash flows:
 
 
14.
An increase in accounts receivable would be __________ to (from) net income, when computing cash flows from operations using the indirect method:
 
 
15.
The indirect method of computing and reporting net cash flows from operating activities involves adjusting               to obtain the net cash provided or used by operating activities.
 
 
16.
Information about cash flows can influence decision makers in important ways. Which of the following questions could be answered by the statement of cash flows? (Check all that apply.)
 
 
17.
The information needed to prepare a statement of cash flows could come from all of the following sources, except the:
 
 
19.
In preparing a cash flows from operating activities using the indirect method, an increase in accounts receivable would be ________ to (from) net income)
 
 
21.
A loss from the sale of an investment would be ________ to (from) net income when computing cash flow from operations, using the indirect method:
 
 
24.
The net cash amount provided by operating activities is identical under both the __________ and _________ methods:
 
 
25.
Net cash used in operating activities was $10,000. Net cash provided by investing activities was $2,000. Net cash provided by financing activities was $5,000. The cash balance at the end of the year was $12,000. The cash balance at the beginning of the year was $      .
 
 
 
 
 
 
 
 
 

27.
The ______ principle requires that important investing and financing activities that do not affect cash receipts or payments must be disclosed at the bottom of the statement of cash flows, or in a note to the financial statements:
 
 
28.
The purchase of merchandise, the sale of goods and services to customers, and expenditures to operate the business are reported on the statement of cash flows under _______ activities:
 
 
30.
The statement of cash flows reports all of the following except:
 
 
32.
To compute cash flows from financing activities, accountants normally analyze changes in all of the following accounts except:
 
 
33.
Which of the following entries would be included in the operating section, when preparing the statement of cash flows using the indirect method:
 
 
34.
Which of the following items are classified as non-cash investing and financing activities:
 
 
 

39.
Which of the following items would be subtracted from net income when reporting cash flows from operating activities, using the indirect method:
 
 
40.
Which of the following items would not be adjusted to net income when computing cash flows from operating activities, using the indirect method:
 
 
41.
Which of the following questions could not be answered from the statement of cash flows:
 
 
42.
Which of the following statements about the statement of cash flows are correct? (Check all that apply.)
 
 
43.
Which of the following would not be reported under financing activities on the statement of cash flows:
 
 
 

2.
An alternative to using the cas account to analyze the changes in cash during a period, a company may analyze noncash accounts including each of the following:
 
 
3.
A(n)       , also called a worksheet, can help organize the information needed to prepare a statement of cash flows.
 
 
6.
Carol Co. prepares a statement of cash flows starting with net income and then adjusting for items necessary to obtain net cash provided or used by operating activities. Carol Co. must be using the (direct/indirect)        method of reporting the statement of cash flows.
 
 
8.
Cash flows from operating activities under the __________ method adjusts accrual-based income
statement items to a cash basis.
 
 
10.
A company reported total assets at the end of 2017 of $95,000; including cash of $35,000, accounts receivable of $20,000, and inventory of $40,000. It reported total assets at the end of 2018 of $110,000; including cash of $44,000; accounting receivable of $29,000, and inventory of $37,000. Compute the net increase or decrease in cash in 2018.
 
 
11.
A company's cash receipts and cash payments are recorded in the cash account in its general ledger. Identify which of the following could not be determined by analyzing the cash account.
 
 
12.
A company's cash receipts and cash payments are recorded in the cash accounts in its general ledger. Which of the following can be determined by analyzing the cash account?
 
 
14.
The equipment account had a $36,000 balance at the beginning of the year, and a $30,000 balance at the end of the year. The accumulated depreciation account had a balance of $22,000 at the beginning of the year, and a $17,000 balance at the end of the year. The income statement reported depreciation expense of $4,000 for the year. Equipment costing $10,000 was sold for its book value. Cash received from the sale to be reported in the Investing Activities section is $      .
 
 
15.
The formula to compute cash flow on total assets takes cash flow from operations divided by:
 
 
16.
The formula used to compute the cash received from customers under the direct method is:
 
 
18.
A gain from the sale of equipment would be (added/subtracted) ______ to (from) net income, when computing cash flows from operations using the indirect method.
 
 
19.
If all sales are for cash, the amount received from customers will equal the _________ reported on the
income statement.
 
 
21.
Information about cash flows can influence decision makers in important ways. Which of the following questions could be answered by the statement of cash flows?
 
 
22.
The information needed to prepare a statement of cash flows could come from which of the following
sources?
 
 
23.
Interest expense reported on the income statement was $1,000. The beginning balance in Interest
Payable was $150 and the ending balance was $50. Cash paid for interest during the period is equal
to:
 
 
 
 
 
 
 
 
 

24.
It is important to analyze the sources and uses of cash because:
 
 
27.
A net cash ________ occurs when the payments in a category exceed the receipts.
 
 
28.
Net cash provided by operating activities was $12,000. Net cash provided by investing activities was $2,000. Net cash used in financing activities was $7,000. The cash balance at the beginning of the year was $4,000. The cash balance at the end of the year is:
 
 
29.
Other asset transactions affect a company's cash flows from investing activities including
 
 
30.
The purchase of merchandise, the sale of goods and services to customers, and expenditures to operate the business are all reported on the statement of cash flows under _________ activities.
 
 
31.
Retained earnings at the beginning and end of the year totaled $10,000 and $55,000, respectively.
Net income reported during the period was $50,000. Using this information, dividends declared and paid are equal to:
 
 
32.
The statement of cash flows does not report activity for which of the following categories?
 
 
35.
To compute cash flows from financing activities, accountants normally analyze changes in all of the following accounts except:
 
 
37.
When creating a statement of cash flows using the direct method, depreciation is:
 
 
38.
Which of the following entries would be included in the operating section, when preparing the statement of cash flows using the indirect method?
 
 
40.
Which of the following items could be "other cash receipts"?
 
 
 

45.
Which of the following questions could not be answered from the statement of cash flows?
 
 
46.
Which of the following statements about the statement of cash flows are correct?
 
 
48.
Which of the following would not be reported under financing activities on the statement of cash flows?
 
 
49.
Which section of the statement of cash flows is affected by choosing to report using the direct method or indirect method?
 
 
 

1.
______ activities include those transactions and events that affect long-term assets, such as lending and collecting money for notes receivable and cash receipts from sale of long-term plant assets:
 
 
3.
__________ activities include those transactions and events that determine net income:
 
 
5.
The appropriate section in the statement of cash flows for reporting the receipt of cash dividends from investments in securities is:
 
 
7.
Cash flows provided (used) by operating activities are reported in one of two ways: the __________ method or the __________ method. These two methods apply only to the operating activities section:
 
 
8.
A company reported total assets at the end of 2009 of $95,000; including cash of $35,000, accounts receivable of $20,000, and inventory of $40,000. It reported total assets at the end of 2010 of $110,000; including cash of $44,000; accounting receivable of $29,000, and inventory of $37,000. Compute the net increase or decrease in cash in 2010:
 
 
9.
A company's cash receipts and cash payments are recorded in the cash account in its general ledger. Identify which of the following could not be determined by analyzing the cash account:
 
 
10.
Depreciation expense is ______ to (from) net income, when computing cash flows from operations, using the indirect method:
 
 
12.
Identify which of the following items is not a non-cash investment and financing activity that must be reported in a note to the statement of cash flows:
 
 
14.
An increase in accounts receivable would be __________ to (from) net income, when computing cash flows from operations using the indirect method:
 
 
15.
The indirect method of computing and reporting net cash flows from operating activities involves adjusting ________ __________ to obtain the net cash provided or used by operating activities:
 
 
16.
Information about cash flows can influence decision makers in important ways. Which of the following questions could be answered by the statement of cash flows:
 
 
17.
The information needed to prepare a statement of cash flows could come from all of the following sources, except the:
 
 
19.
In preparing a cash flows from operating activities using the indirect method, an increase in accounts receivable would be ________ to (from) net income)
 
 
21.
A loss from the sale of an investment would be ________ to (from) net income when computing cash flow from operations, using the indirect method:
 
 
24.
The net cash amount provided by operating activities is identical under both the __________ and _________ methods:
 
 
25.
Net cash used in operating activities was $10,000. Net cash provided by investing activities was $2,000. Net cash provided by financing activities was $5,000. The cash balance at the end of the year was $12,000. The cash balance at the beginning of the year was $___________ :
 
 
 
 
 
 
 
 
 

27.
The ______ principle requires that important investing and financing activities that do not affect cash receipts or payments must be disclosed at the bottom of the statement of cash flows, or in a note to the financial statements:
 
 
28.
The purchase of merchandise, the sale of goods and services to customers, and expenditures to operate the business are reported on the statement of cash flows under _______ activities:
 
 
30.
The statement of cash flows reports all of the following except:
 
 
32.
To compute cash flows from financing activities, accountants normally analyze changes in all of the following accounts except:
 
 
33.
Which of the following entries would be included in the operating section, when preparing the statement of cash flows using the indirect method:
 
 
34.
Which of the following items are classified as non-cash investing and financing activities:
 
 
 

39.
Which of the following items would be subtracted from net income when reporting cash flows from operating activities, using the indirect method:
 
 
40.
Which of the following items would not be adjusted to net income when computing cash flows from operating activities, using the indirect method:
 
 
41.
Which of the following questions could not be answered from the statement of cash flows:
 
 
42.
Which of the following statements about the statement of cash flows are correct:
 
 
43.
Which of the following would not be reported under financing activities on the statement of cash flows:
 
 
 

2.
An alternative to using the cas account to analyze the changes in cash during a period, a company may analyze noncash accounts including each of the following:
 
 
3.
Analyzing noncash accounts can be challenging when a company has a large number of accounts
and many operating, investing, and financing transactions. A(n) __________ also called a worksheet
or working paper, can help organize the information needed to prepare a statement of cash flows.
 
 
4.
At the beginning of 2017, Rex Co showed a debit balance in the cash account of $20,500, total debits to the account of $45,000, and total credits to the account of $35,000. The net (increase/decrease) ______ in cash for 2017 equals $_____________.
 
 
6.
Carol Co. prepares a statement of cash flows starting with net income and then adjusting for items
necessary to obtain net cash provided or used by operating activities. Carol must be using the
(direct/indirect) _________ method of reporting the statement of cash flows.
 
 
8.
Cash flows from operating activities under the __________ method adjusts accrual-based income
statement items to a cash basis.
 
 
9.
Collecting money for notes receivable would be reported on the statement of cash flows as a(n) ___________ activity.
 
 
10.
A company reported total assets at the end of 2017 of $95,000; including cash of $35,000, accounts receivable of $20,000, and inventory of $40,000. It reported total assets at the end of 2018 of $110,000; including cash of $44,000; accounting receivable of $29,000, and inventory of $37,000. Compute the net increase or decrease in cash in 2018.
 
 
11.
A company's cash receipts and cash payments are recorded in the cash account in its general ledger. Identify which of the following could not be determined by analyzing the cash account.
 
 
12.
A company's cash receipts and cash payments are recorded in the cash accounts in its general ledger. Which of the following can be determined by analyzing the cash account?
 
 
14.
The equipment account had a $36,000 balance at the beginning of the year, and a $30,000 balance
at the end of the year. The accumulated depreciation account had a balance of $22,000 at the
beginning of the year, and a $17,000 balance at the end of the year. The income statement reported
depreciation expense of $4,000 for the year. Equipment costing $10,000 was sold for its book value.
Cash received from the sale was $___________.
 
 
15.
The formula to compute cash flow on total assets takes cash flow from operations divided by:
 
 
16.
The formula used to compute the cash received from customers under the direct method is:
 
 
18.
A gain from the sale of equipment would be (added/subtracted) ______ to (from) net income, when computing cash flows from operations using the indirect method.
 
 
19.
If all sales are for cash, the amount received from customers will equal the _________ reported on the
income statement.
 
 
21.
Information about cash flows can influence decision makers in important ways. Which of the following questions could be answered by the statement of cash flows?
 
 
22.
The information needed to prepare a statement of cash flows could come from which of the following
sources?
 
 
23.
Interest expense reported on the income statement was $1,000. The beginning balance in Interest
Payable was $150 and the ending balance was $50. Cash paid for interest during the period is equal
to:
 
 
 
 
 
 
 
 
 

24.
It is important to analyze the sources and uses of cash because:
 
 
27.
A net cash ________ occurs when the payments in a category exceed the receipts.
 
 
28.
Net cash provided by operating activities was $12,000. Net cash provided by investing activities was $2,000. Net cash used in financing activities was $7,000. The cash balance at the beginning of the year was $4,000. The cash balance at the end of the year:
 
 
29.
Other asset transactions affect a company's cash flows from investing activities including
 
 
30.
The purchase of merchandise, the sale of goods and services to customers, and expenditures to operate the business are all reported on the statement of cash flows under _________ activities.
 
 
31.
Retained earnings at the beginning and end of the year totaled $10,000 and $55,000, respectively.
Net income reported during the period was $50,000. Using this information, dividends declared and paid are equal to:
 
 
32.
The statement of cash flows does not report activity for which of the following categories?
 
 
34.
There are five important steps to preparing a statement of cash flows. Rank the steps in order from first to last.
 
 
35.
To compute cash flows from financing activities, accountants normally analyze changes in all of the following accounts except:
 
 
37.
When creating a statement of cash flows using the direct method, depreciation is:
 
 
38.
Which of the following entries would be included in the operating section, when preparing the statement of cash flows using the indirect method?
 
 
40.
Which of the following items could be "other cash receipts"?
 
 
 

42.
Which of the following items would be adjusted to net income when computing cash flows from operating activities, using the indirect method?
 
 
45.
Which of the following questions could not be answered from the statement of cash flows?
 
 
46.
Which of the following statements about the statement of cash flows are correct?
 
 
48.
Which of the following would not be reported under financing activities on the statement of cash flows?
 
 
49.
Which section of the statement of cash flows is affected by choosing to report using the direct method or indirect method?
 
 
 

1.
___ activities include those transactions and events that determine net income
 
 
3.
At the beginning of 2018, a debit balance in the cash account of $20,500. Total debits to this account during the year was $45,000 and total credits during the year were $35,000. The net (increase/decrease) in cash for 2018 is $___
 
 
5.
cash flows from financing activities identifies cash receipts and payments related to which accounts?
 
 
6.
cash flows from operating activities method adjusts accrual-based income statement items to a cash basis
 
 
7.
collecting money for notes receivable would be reported on the statement of cash flows as an ___ activity
 
 
8.
depreciation expense is ___ to net income, when computing cash flows from operations, using the indirect method
 
 
10.
___ helps identify the risk of accounting improprieties
 
 
11.
if all sales are for cash, the amount received from customers will equal the ___ reported on the income statement
 
 
13.
the indirect method of computing and reporting net cash flows from operating activities involves adjusting ___ to obtain the net cash provided or used by operating activities
 
 
15.
to compute cash flows from financing activities, accountants normally analyze changes in all but: common stock, bonds payable, interest payable, retained earning, notes payable
 
 
17.
when creating a statement of cash flows using the direct method, depreciation is
 
 
18.
which of the following items would not be adjusted to net income when computing cash flows from operating activities, using the indirect method: cash received from sale of building, depreciation expense, gain on sale of building
 
 
19.
which of the following would be correct adjustments to net income to arrive at cash flows from operating activities, indirect method: add increase in accounts payable, subtract increase in wages payable, subtract increase in inventory, add increase in accounts receivable
 
 
20.
which of the following would be correct adjustments to net income when computing cash flows from operating activities, indirect method: depreciation expense, increase in market value of stock, loss on sale of investment, gain on sale of building
 
 
22.
which would be reported under financing activities: cash paid to repay cash loans, cash received from issuing notes payable, cash dividends paid to shareholders, cash paid for interest on long term debt