 |
| 1 | |
A major purpose of the statement of cash flows is to accomplish which of the following? |
| | A) | Evaluate only the company's ability to have sufficient cash for short-run needs |
| | B) | Assess only the company's ability to meet its obligations and pay dividends |
| | C) | Assess only the cash aspects of the company's investment and financing transactions for the period |
| | D) | All of the above |
|
|
|
| 2 | |
A company issued $1,000,000 of bonds at face value. On the maturity date, the company repaid the $1,000,000 plus interest of $150,000 that was accrued from the last interest date. What portion of the payment of the bonds is an operating activity? |
| | A) | $150,000 |
| | B) | $1,000,000 |
| | C) | $1,150,000 |
| | D) | None of the amount |
|
|
|
| 3 | |
Consider the following:
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/007802577x/1036574/CH13_Q3.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (20.0K)</a>]]>
Assume all sales were credit sales. Calculate the amount of cash received from customers. |
| | A) | $620,000 |
| | B) | $580,000 |
| | C) | $630,000 |
| | D) | $395,000 |
|
|
|
| 4 | |
Net cash provided by operating activities was $45,000. Net cash provided by investing activities was $50,000. The beginning and ending cash and cash equivalent balance was $12,000 and $14,000, respectively. What was the cash flow provided (used) by financing activities? |
| | A) | ($95,000) |
| | B) | ($93,000) |
| | C) | ($97,000) |
| | D) | Cannot be determined from information provided. |
|
|
|
| 5 | |
Cash dividends of $48,500 were declared. The beginning and ending balance of the Cash Dividends Payable account was $8,000 and $10,500, respectively. In the statement of cash flows, how are the cash dividend transactions reported? |
| | A) | As an investing activity of $51,000 |
| | B) | As a financing activity of $46,000 |
| | C) | As a financing activity of $48,500 |
| | D) | As an investing activity of $46,000 |
|
|
|
| 6 | |
Which of the following is true? |
| | A) | The Financial Accounting Standards Board (FASB) recommends the direct method of reporting cash flows from operating activities. |
| | B) | The majority of companies use the indirect method of reporting cash flows from operating activities. |
| | C) | When the direct method is used to report the cash flows from operating activities, it must be shown that the amount is consistent with the amount reported under the indirect method. |
| | D) | All of the above are true. |
|
|
|
| 7 | |
Which feature distinguishes the direct method from the indirect method of reporting cash flows from operating activities? |
| | A) | The indirect method adjusts accrual-basis net income to net cash flows from operating activities, but the direct method does not. |
| | B) | The indirect method reports gain and losses on assets as cash flows from operating activities, but the direct method does not. |
| | C) | The indirect method reports financing activities differently than the direct method. |
| | D) | The indirect method ignores depreciation expense, but the direct method does not. |
|
|
|
| 8 | |
In the indirect method of reporting cash flows from operating activities, how are the gains on the sales of assets reported in the statement of cash flows? |
| | A) | Deducted from the reported net income. |
| | B) | Added to reported net income. |
| | C) | Ignored. |
| | D) | Shown as investing activities. |
|
|
|
| 9 | |
Strategies to permanently improve cash flows include which of the following? |
| | A) | Deferring income taxes |
| | B) | Changing credit policies from n60 to n30 |
| | C) | Peak pricing |
| | D) | Both (A) and (C) |
|
|
|
| 10 | |
Consider the following partial worksheet for a statement of cash flows:
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/007802577x/1036574/CH13_Q10.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (34.0K)</a>]]>
Calculate the net cash flow from operating activities. |
| | A) | $350,000 |
| | B) | $550,000 |
| | C) | $230,000 |
| | D) | $410,000 |
|
|
.