Question 1

The statement of cash flows shows the effects on net income of a company's operating, investing, and financing activities for an accounting period.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following items does not appear in the statement of cash flows under the direct method?

Accepted Answer

A)  Cash payments to suppliers.
B)  Cash collections from customers.
C)  Depreciation Expense.
D)  Cash from the sale of equipment.

Question 3

All of the following statements about free cash flow are false except

Accepted Answer

A)  significant free cash flow indicates less potential to finance new investment.
B)  free cash flow is most commonly calculated by subtracting capital expenditures from cash provided by operations and then adding cash dividends.
C)  free cash flow is not reported on the statement of cash flows.
D)  significant free cash flow indicates less potential to pay additional dividends.

Question 4

Generally, the most important category on the statement of cash flows is cash flows from

Accepted Answer

A)  operating activities.
B)  investing activities.
C)  financing activities.
D)  significant noncash activities.

Question 5

The receipt of dividends from long-term investments in stock is classified as a cash inflow from investing activities.

Accepted Answer

A) True 
 B)False

Question 6

Cash flows from operating activities, as reported on the statement of cash flows under the indirect method, would include

Accepted Answer

A)  receipts from the sale of investments.
B)  net income.
C)  payments for dividends.
D)  receipts from the issuance of capital stock.

Question 7

Cash receipts from customers are greater than sales revenues when there is a(n)

Accepted Answer

A)  increase in accounts receivable.
B)  decrease in accounts receivable.
C)  increase in cost of goods sold.
D)  decrease in cost of goods sold.

Question 8

All of the following statements are true regarding cash flow presentations except

Accepted Answer

A)  the balance sheet provides only limited information about a company's cash flows.
B)  the balance sheet provides information about how property, plant, and equipment were financed.
C)  the income statement does not show how much cash was generated by operating activities.
D)  if cash from operations is compared to net income, information about the quality of reported net income is revealed.

Question 9

Which one of the following affects cash during a period?

Accepted Answer

A)  Recording depreciation expense.
B)  Declaration of a cash dividend.
C)  Write-off of an uncollectible account receivable.
D)  Payment of an accounts payable.

Question 10

Brad Ford Company reports a $48,000 increase in inventory and a $12,000 increase in accounts payable during the year. Cost of goods sold for the year was $285,000. Using the direct method of reporting cash flows from operating activities, cash payments made to suppliers were

Accepted Answer

A)  $285,000.
B)  $321,000.
C)  $249,000.
D)  $237,000.

Exam 11: Statement of Cash Flows

Cash flows from operating activities, as reported on the statement of cash flows under the indirect method, would include

Correct Answer
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All of the following statements are true regarding cash flow presentations except

Correct Answer
verified

Which of the following items does not appear in the statement of cash flows under the direct method?

Correct Answer
verified

Which one of the following affects cash during a period?

Correct Answer
verified

Generally, the most important category on the statement of cash flows is cash flows from

Correct Answer
verified

All of the following statements about free cash flow are false except

Correct Answer
verified

Brad Ford Company reports a $48,000 increase in inventory and a $12,000 increase in accounts payable during the year. Cost of goods sold for the year was $285,000. Using the direct method of reporting cash flows from operating activities, cash payments made to suppliers were

Correct Answer
verified

The receipt of dividends from long-term investments in stock is classified as a cash inflow from investing activities.

Correct Answer
verified

The statement of cash flows shows the effects on net income of a company's operating, investing, and financing activities for an accounting period.

Correct Answer
verified

Cash receipts from customers are greater than sales revenues when there is a(n)

Correct Answer
verified

Exam 11: Statement of Cash Flows

Cash flows from operating activities, as reported on the statement of cash flows under the indirect method, would include

Correct AnswerverifiedShow Answer

All of the following statements are true regarding cash flow presentations except

Correct AnswerverifiedShow Answer

Which of the following items does not appear in the statement of cash flows under the direct method?

Correct AnswerverifiedShow Answer

Which one of the following affects cash during a period?

Correct AnswerverifiedShow Answer

Generally, the most important category on the statement of cash flows is cash flows from

Correct AnswerverifiedShow Answer

All of the following statements about free cash flow are false except

Correct AnswerverifiedShow Answer

Brad Ford Company reports a $48,000 increase in inventory and a $12,000 increase in accounts payable during the year. Cost of goods sold for the year was $285,000. Using the direct method of reporting cash flows from operating activities, cash payments made to suppliers were

Correct AnswerverifiedShow Answer

The receipt of dividends from long-term investments in stock is classified as a cash inflow from investing activities.

Correct AnswerverifiedShow Answer

The statement of cash flows shows the effects on net income of a company's operating, investing, and financing activities for an accounting period.

Correct AnswerverifiedShow Answer

Cash receipts from customers are greater than sales revenues when there is a(n)

Correct AnswerverifiedShow Answer

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