12/6: I<Clicker Questions

1. decrease in accounts receivable, 2. issuance of common stock, 3. increase in interest receivable, 4. purchase of land, 5. decrease in accounts payable, 6. gain on the sale of equipment, 7. depreciation expense, 8. payment of dividends, 9. decrease in utilities payable, 10. increase in inventory How many of these items would be subtracted from net income when using the indirect method to prepare the operating activities section of the statement of cash flows? A. 5 B. 4 C. 1 D. 2

A.

A decrease in wages payable represents a decrease in cash A. true B. false

A.

A reduction of inventory represents an increase in cash A. true B. false

A.

Given the items below, which of the following is an addition to net income to arrive at operating cash flows? I. loss on sale of assets II. increase in supplies III. increase in accounts payable IV. increase in accounts receivable A. I and III B. I only C. III and IV D. II and III

A.

LePage's, Inc. reported net income of $135,000. Beginning balances in Accounts Receivable and Accounts Payable were $29,000 and $28,000 respectively. Ending balances in these accounts were $30,000 and $24,000, respectively. Assuming that all relevant information has been presented, LePage's net cash flows from operating activities would be: A. $132,000 B. $134,000 C. $136,000 D. $138,000

A.

Which of the following is not true regarding cash flows? A. operating activities include the payment of dividends B. investing activities involve long-term investments C. financing activities involve long-term liabilities and equities D. purchasing a building with a note is considered a non-cash activity

A.

A company collected an accounts receivable. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows A. does not represent a cash flow B. operating activities section C. financing activities section D. investing activities section

B.

An increase in accounts receivable represents a increase in cash A. true B. false

B.

Cash flows from investing activities include A. proceeds from the issuance of common stock B. cash outflows from acquiring land C. retirement of bonds payable D. interest received

B.

How is an increase in inventory reported on the statement of cash flows. What is the effect on cash flows? A. operating activities & increase in cash B. operating activities & decrease in cash C. investing activities & increase in cash D. financing activities & increase in cash E. non-cash transactions & no change in cash

B.

Which of the following represents an increase in cash flows? A. increase in inventory B. increase in accounts payable C. decrease in accounts payable D. increase in prepaid insurance

B.

All classifications on the Balance sheet have a general relationship with sections identified on the statement of cash flows. indicate which relationships are correctly identified in the table belos #;classification on the B/S Section; section on stmt. of cash flows 1;bonds payable; financing 2 ;equipment; operating 3 ;common stock; financing 4. ;accounts payable; operating 5.; accounts receivable; operating A. 4,5 B. 1,2,3 C. I, 3, 4, 5 D. all of these

C.

How are dividends paid reported on the statement of cash flows? A. operating activities B. investing activities C. financing activities D. schedule of non-cash transactions E. not on the statement of cash flows

C.

How is the issuance of common stock reported on the statement of cash flows? A. operating activities B. investing activities C. financing activities D. schedule of non-cash transactions E. not on the statement of cash flows

C.

The issuance of notes payable for borrowing is classified in the statement of cash flows as a(n): A. investing activity B. operating activity C. financing activity D. non-cash activity

C.

We can identify operating activities from income statement information and changes in A. long-term asset accounts B. long-term liability accounts C. current asset and current liability accounts D. stockholders' equity accounts

C.

We can identify operating activities from income statement information and changes in A. long-term asset accounts B. long-term liability accounts C. current asset and current liability accounts D. stockholders' equity accounts

C.

Which of the following would be added to net income to arrive at net cash flows from operating activities? A. decrease in accrued liabilities B. gain on sale of investments C. decrease in prepaid expenses D. increase in accounts receivable

C.

A company issued common stock for cash. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows. A. operating activities section B. does not represent a cash flow section C. investing activities section D. financing activities section

D.

How is sale of treasury stock reported on the statement of cash flows. What is the effect on cash flows? A. operating activities & increase in cash B. operating activities & decrease in cash C. investing activities & increase in cash D. financing activities & increase in cash E. non-cash transaction & no effect on cash

D.

LePage's Inc. reports net income of $95,000. The accounting records reveal Depreciation expense of $50,000 as well as increases in prepaid rent, accounts payable, and income tax payable of $40,000, $23,000, and $20,000, respectively. What is the net cash flows from operating activities? A. $188,000 B. $228,000 C. $128,000 D. $148,000

D.