Chapter 16 Quiz

The order of presentation of activities on the statement of cash flows is operating, investing, and financing. operating, financing, and investing. financing, operating, and investing. financing, investing, and operating.

On the statement of cash flows, a $7,500 gain on the sale of fixed assets would be added to net income in converting the net income reported on the income statement to cash flows from operating activities deducted from net income in converting the net income reported on the income statement to cash flows from operating activities added to dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends deducted from dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends

Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method? depreciation expense gain on sale of land a loss on the sale of equipment dividends declared and paid

On the statement of cash flows prepared by the indirect method, the cash flows from operating activities section would include receipts from the sale of investments amortization of premium on bonds payable payments for cash dividends receipts from the issuance of capital stock

Which of the following is a noncash investing and financing activity? payment of a cash dividend payment of a six-month note payable purchase of merchandise inventory on account issuance of common stock to acquire land

Sales for the year were $600,000. Accounts receivable were $100,000 and $80,000 at the beginning and end of the year. Cash received from customers to be reported on the cash flow statement using the direct method is $700,000 $600,000 $580,000 $620,000

The following selected account balances appeared on the financial statements of the Washington Company: Accounts Receivable, Jan. 1 $13,000 Accounts Receivable, Dec. 31 9,000 Accounts Payable, Jan 1 4,000 Accounts payable Dec. 31 7,000 Merchandise Inventory, Jan 1 10,000 Merchandise Inventory, Dec 31 15,000 Sales 56,000 Cost of Goods Sold 31,000 The Washington Company uses the direct method to calculate net cash flow from operating activities. Cash collections from customers are $56,000 $52,000 $60,000 $45,000

A building with a book value of $54,000 is sold for $63,000 cash Using the indirect method, this transaction should be shown on the statement of cash flows as follows: an increase of $54,000 from investing activities an increase of $63,000 from investing activities and a deduction from net income of $9,000 an increase of $9,000 from investing activities an increase of $54,000 from investing activities and an addition to net income of $9,000

A corporation uses the indirect method for preparing the Statement of Cash Flows. A fixed asset has been sold for $25,000 representing a gain of $4,500. The value in the operating activities section regarding this event would be: $25,000 ($4,500) $29,500 $4,500

he following selected account balances appeared on the financial statements of the Washington Company: Accounts Receivable, Jan. 1 $13,000 Accounts Receivable, Dec. 31 9,000 Accounts Payable, Jan 1 4,000 Accounts payable Dec. 31 7,000 Merchandise Inventory, Jan 1 10,000 Merchandise Inventory, Dec 31 15,000 Sales 56,000 Cost of Goods Sold 31,000 The Washington Company uses the direct method to calculate net cash flow from operating activities. Cash paid to suppliers is $39,000 $33,000 $29,000 $23,000

Which of the following would not be found in a Schedule of Noncash Investing and Financing Activities, reported at the end of a Statement of Cash Flows? equipment acquired in exchange for a note payable bonds payable exchanged for capital stock purchase of treasury stock capital stock issued to acquire fixed assets

Which one of the following below should be added to net income in calculating net cash flow from operating activities using the indirect method? a gain on the sale of land a decrease in accounts payable an increase in accrued liabilities dividends paid on common stock

Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method? a decrease in inventory a decrease in accounts payable preferred dividends declared and paid a decrease in accounts receivable

Cash receipts from interest and dividends are classified as financing activities operating activities. investing activities. either financing or investing activities.

Which of the following represents an inflow of cash and therefore would be reported on the statement of cash flows? retirement of bond payable acquisition of treasury stock declaration of stock dividends issuance of long-term debt

Which of the following can be found on the statement of cash flows? cash flows from operating activities total assets total changes in stockholders' equity changes in retained earnings

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method? an increase in inventory a decrease in accounts payable preferred dividends declared and paid a decrease in accounts receivable

Equipment with an original cost of $75,000 and accumulated depreciation of $20,000 was sold at a loss of $7,000. As a result of this transaction, cash would increase by $48,000 decrease by $7,000 increase by $55,000 decrease by $27,000

The statement of cash flows is not useful for: planning future investing and financing activities determining a company's ability to pay its debts determining a company's ability to pay dividends calculating the net worth of a company

Which of the following should be shown on a statement of cash flows under the financing activity section? he purchase of a long-term investment in the common stock of another company the payment of cash to retire a long-term note the proceeds from the sale of a building the issuance of a long-term note to acquire land

Cash paid for equipment would be reported in the statement of cash flows in the cash flows from operating activities section the cash flows from financing activities section the cash flows from investing activities section a separate schedule

The following information is available from the current period financial statements: Net income $165,000 Depreciation expense 28,000 Increase in accounts receivable 16,000 Decrease in accounts payable 21,000 The net cash flow from operating activities using the indirect method is $230,000 $188,000 $198,000 $156,000

Zenith Corporation sells some of its used store fixtures. The acquisition cost of the fixtures is $12,500, the accumulated depreciation on these fixtures is $9,750 at the time of sale. The fixtures are sold for $5,300. The value of this transaction in the Investing section of the statement of cash flows is: $12,500 $5,300 $2,750 $2,550

The last item on the statement of cash flows prior to the schedule of noncash investing and financing activities reports the increase or decrease in cash cash at the end of the year net cash flow from investing activities net cash flow from financing activities

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method? depreciation expense an increase in inventory a gain on the sale of equipment dividends declared and paid