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The repayment of the principal of a loan which had been used to finance the purchase of equipment should be reported on the statement of cash flows as a


A) cash outflow from investing activities.
B) cash outflow from operating activities.
C) cash outflow from financing activities.
D) noncash transaction in a supplemental disclosure.

E) A) and D)
F) None of the above

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Cash transactions relating to the purchase and sale of which types of assets affect a company's cash flows from investing activities?


A) All of a company's assets.
B) All of a company's assets except inventory.
C) All of a company's non-current assets.
D) Only property,plant and equipment.

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

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The following information is taken from the 2014 income statement of Muir Company: The following information is taken from the 2014 income statement of Muir Company: Based on this information,what is the amount of net cash flow from operating activities? A) $149,000 B) $140,000 C) $146,000 D) $134,000 Based on this information,what is the amount of net cash flow from operating activities?


A) $149,000
B) $140,000
C) $146,000
D) $134,000

E) B) and C)
F) A) and D)

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When the direct method is used to determine the cash flows from operating activities,which of the following adjustments must be made to interest expense to determine total interest payments?


A) Add all changes in interest payable.
B) Add decreases in interest payable and subtract increases in interest payable.
C) Add increases in interest payable and subtract decreases in interest payable.
D) Subtract all changes in interest payable.

E) A) and B)
F) All of the above

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The statement of cash flows explains the difference between the beginning and ending balances of cash and cash equivalents.

A) True
B) False

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Cinno Company reported net income of $20,000 for the year ended December 31,2014.During the year,inventories decreased by $7,000,accounts payable decreased by $8,000,depreciation expense was $10,000,and accounts receivable increased by $6,500.Net cash provided by operations in 2014,computed using the indirect method was:


A) $10,500.
B) $22,500.
C) $38,500.
D) $51,500.

E) B) and C)
F) All of the above

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The statement of cash flows cannot be used to determine


A) changes in working capital.
B) expenditures on long-term assets.
C) profitability as measured by specific revenues and expenses.
D) reliance on external financing.

E) All of the above
F) A) and D)

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Using the T-account approach to preparing the statement of cash flows,an increase in accounts payable would appear on the debit side of the cash account.

A) True
B) False

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If a company reports negative net cash flow from operating activities,positive net cash flow from investing activities,and zero net cash flow from financing activities,this suggests that the company is selling its productive assets to cover its operating activities outflows.

A) True
B) False

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If a company uses the indirect method to determine cash flows from operating activities:


A) gains must be added to net income and losses subtracted from net income.
B) gains and losses must be added to net income.
C) gains must be subtracted from net income and losses added to net income.
D) gains and losses must be subtracted from net income.

E) None of the above
F) All of the above

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Which of the following statements is not true?


A) The statement of cash flows does not replace the income statement.
B) The statement of cash flows provides details as to how cash changed during a period.
C) The statement of cash flows provides information about cash receipts and cash payments over a period of time.
D) The statement of cash flows measures profitability.

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

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Free cash flow is a positive cash flow:


A) beyond what is needed to replace current property,plant,and equipment and pay dividends.
B) across all three activity components of the statement of cash flows.
C) beyond what has been allotted for future property,plant,and equipment replacement and expansion.
D) across both financing and investing activities.

E) B) and C)
F) None of the above

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The T-account approach


A) may be used with the direct method.
B) creates one big T-account for cash that replaces separate schedules to show all the changes in the cash account.
C) shows cash provided as credits and cash used as debits.
D) does not determine the change in each balance sheet account.

E) C) and D)
F) None of the above

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Investing activities include receiving cash from selling land and any resulting gain or loss on the sale.

A) True
B) False

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Which of the following journal entries would have an effect on cash from operating activities?


A) Recording bad debts.
B) Recording depreciation.
C) Recording loss on sale of investment.
D) Recording cash paid for interest on long-term note payable.

E) None of the above
F) A) and C)

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Use the information above to answer the following question.The company would report net cash provided by (used in) financing activities of:


A) $(2,500)
B) $2,000
C) $5,000
D) $6,000

E) C) and D)
F) B) and D)

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Use the information above to answer the following question.If the cash balance at the beginning of the current year was $0,what is the amount of cash at the end of the year?


A) $112,500
B) $425,000
C) $737,500
D) $311,500

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

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The retained earnings account has a beginning balance of $321,975 and an ending balance of $356,413.Net income is $40,251.Which of the following statements is true?


A) $5,813 would be subtracted when determining cash flows from financing activities.
B) $40,251 would be added when determining cash flows from financing activities.
C) $34,438 would be added when determining cash flows from financing activities.
D) $321,975 would be added when determining cash flows from operating activities.

E) None of the above
F) B) and D)

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Supplemental disclosures required by companies using the indirect method include all of the following except:


A) cash paid for interest.
B) cash paid for income tax.
C) cash paid for dividends.
D) noncash investing and financing activities.

E) None of the above
F) A) and B)

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Use the information above to answer the following question.What is the amount of cash paid for insurance?


A) $13,000
B) $12,000
C) $14,000
D) $16,000

E) All of the above
F) A) and C)

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Showing 81 - 100 of 147

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