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Exam 11: The Statement of Cash Flows

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Question 61

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The following information was taken from the financial records of Mr. Transmission: How would the change in accounts payable be reported in the operating activities section of the statement of cash flows under the indirect method?

A) As an addition to operating expenses.
B) As a deduction from operating expenses.
C) As an addition to net income.
D) As a deduction from net income.

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Question 62

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The use of a ______________ provides a means of systematically analyzing changes in the balance sheet amounts, along with the information from the income statement and any additional information, to produce the statement of cash flows.

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Question 63

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The financial statement that summarizes the operating, investing, and financing activities of a business over a period of time is the ____________________.

Selected data from the financial statements for the years ended December 31, 2014 and 2013, are presented below: The following additional information was obtained from the company's records: -Refer to Maritime Marine Services. What was the cost of investments purchased during 2014?

Because the cash received from the sale of long-term assets is reported in the investing activities section of the statement of cash flows, any gain or loss is ignored when reporting the cash flow from operating activities under the indirect method.

Which of the following financing activities results in a cash inflow?

An investment in common stock is not considered to be a cash equivalent.

When using the indirect method to determine operating cash flows, how is the issuance of stock to retire a long-term debt shown on a statement of cash flows?

For the statement of cash flows, companies are required to classify their cash activities into three categories: operating, investing, and financing.

Selected data and additional information from the company's records are presented below: Additional information: -Refer to Mary Kay Cosmetics. Prepare the investing activities section of the company's statement of cash flows for 2014.

During 2013, the accounts receivable balance increased.

When using the indirect method to determine operating cash flows, how is depreciation expense recorded on the Statement of Cash Flows?

When using the indirect method to determine operating cash flows, how is the issuing of stock for cash shown on the Statement of Cash Flows?

Selected data and additional information from the company's records are presented below: Additional information: -Refer to Mary Kay Cosmetics. How would the transaction to acquire a building by signing a 20-year mortgage note payable be reported on the statement of cash flows for 2014?

Selected data and additional information from the company's records are presented below: Additional information: -Refer to Mary Kay Cosmetics. Prepare the company's statement of cash flows for the year ended December 31, 2014. Use the indirect method of determining net cash flows from operating activities.

Use the following codes to indicate how the cash flow effect, if any, of each transaction or event would be reported on a statement of cash flows if the operating activities section is prepared using the indirect method. (Choices may be used more than once.) a.Operating activity--add to net income b.Operating activity--deduct from net income c.Inflow from investing activity d.Outflow from investing activity e.Inflow from financing activity f.Outflow from financing activity g.Noncash investing and financing activity h.Not reported on statement of cash flows -Purchased land for cash.

Match these terms with their correct definition. a.Cash flow adequacy ratio b.Cash flows from financing activities c.Cash flows from investing activities d.Cash flow from operating activities e.Direct method f.Free cash flow g.Income statement h.Indirect method i.Noncash investing & financing activities j.Statement of cash flows -Determines operating cash flow by adjusting each item on the income statement by the changes in the related current asset or liability accounts.

Cash ________________ are items readily convertible into a known amount of cash which have an original maturity to the investor of 3 months or less.

Which of the following is not a current reporting requirement for a statement that reports changes in cash over a period of time?

When using the indirect method to determine operating cash flows, how would the retirement of bonds payable at their maturity date be shown on the Statement of Cash Flows?