chat 12 A-304

Norbert Company reports the following net cash flows in its statement of cash flows: net cash provided from operating activities: $200; net cash used from investing activities: $(220); net cash provided from financing activities: $130. The current year beginning balance of cash was $80. During the current year, cash must have Blank______. Multiple choice question. decreased by $190 decreased by $110 increased by $190 increased by $110

increased by $110

A change in Accounts Receivable will be reported in the " " section of the statement of cash flows prepared using the indirect method.

operating

Cash flows from Blank______ activities relate directly to the revenues and expenses reported on the income statement. Multiple choice question. investing direct financing operating

operating

Decreases the Net cash used by financing activities Decreases the Net change in cash and equivalents

the same

Beginning accounts receivable is $20,000, and ending accounts receivable is $30,000. As a result, cash collected from customers is Blank______ than sales on account. Multiple choice question. $10,000 less $10,000 greater $30,000 greater $30,000 less

$10,000 less

Beginning accounts receivable is $20,000, and ending accounts receivable is $30,000. As a result, cash collected from customers is Blank______ than sales on account. Multiple choice question. $30,000 greater $10,000 less $30,000 less $10,000 greater

$10,000 less

Beginning accounts receivable is $20,000, and ending accounts receivable is $15,000. As a result, cash collected from customers is Blank______ than sales on account. Multiple choice question. $20,000 less $5,000 less $5,000 greater $20,000 greater

$5,000 greater

Beginning inventory is $15,000, and ending inventory is $20,000. As a result, purchases are Blank______ than cost of goods sold. Multiple choice question. $5,000 greater $5,000 less $20,000 greater $20,000 less

$5,000 greater

Beginning prepaid expenses is $20,000, and ending prepaid expenses is $15,000. As a result, cash payments are Blank______ than the related expense and thus Blank______ net income in the operating section of the statement of cash flows. Multiple choice question. $20,000 greater; this increase is added to $5,000 less; this decrease is added to $5,000 greater; this increase is subtracted from $20,000 less; this decrease is subtracted from

$5,000 less; this decrease is added to

Beginning prepaid expenses is $20,000, and ending prepaid expenses is $15,000. As a result, cash payments are Blank______ than the related expense and thus Blank______ net income in the operating section of the statement of cash flows. Multiple choice question. $20,000 less; this decrease is subtracted from $5,000 greater; this increase is subtracted from $5,000 less; this decrease is added to $20,000 greater; this increase is added to

$5,000 less; this decrease is added to

Which account on the balance sheet would explain why cash collected on the statement of cash flows differs from revenue on the income statement. Multiple choice question. Accounts receivable Prepaids Inventory Accounts payable

Accounts receivable

Which of the following is the best measure of a company's profitability? Multiple choice question. Cash-based net income Sales revenue Accounts receivable Accrual-based net income

Accrual-based net income

Which of the following cash flows are classified as operating activities? (Check all that apply.) Multiple select question. Payment of dividends Cash for purchasing a warehouse to be used in the business Cash flow causing decrease in current liabilities Cash for reacquiring common stock into treasury Cash from revenue earned in daily transactions Cash from sale of investments

Cash flow causing decrease in current liabilities Cash from revenue earned in daily transactions

Which of these would be reported in the financing activities section of the statement of cash flows? (Check all that apply.) Multiple select question. Cash paid to reduce the principal borrowed from banks Cash dividends paid to stockholders Cash paid to buy land Cash paid to buy computers Cash borrowed from the bank

Cash paid to reduce the principal borrowed from banks Cash dividends paid to stockholders Cash borrowed from the bank

Which of the following variations of the accounting equation describes the preparation of the statement of cash flows? Change in Cash = Blank______. Multiple choice question. Change in Liabilities - Change in Stockholders' Equity + Change in Noncash Assets Change in Liabilities + Change in Stockholders' Equity + Change in Noncash Assets Change in Liabilities - Change in Stockholders' Equity - Change in Noncash Assets Change in Liabilities + Change in Stockholders' Equity - Change in Noncash Assets

Change in Liabilities + Change in Stockholders' Equity - Change in Noncash Assets

What effect does the purchase of property, plant and equipment have on the statement of cash flows? (Check all that apply.) Multiple select question. Decreases the Net cash used by operating activities Increases the Net cash used by operating activities Decreases Net cash used by investing activities Increases the Net change in cash and equivalents Increases Net cash used by investing activities Decreases the Net change in cash and equivalents

Decreases Net cash used by investing activities Decreases the Net change in cash and equivalents

What effect does the repurchase of stock have on the statement of cash flows? (Check all that apply.) Multiple select question. Decreases the Net cash used by financing activities Increases Net cash used by investing activities Increases the Net change in cash and equivalents Decreases the Net change in cash and equivalents Increases the Net cash used by financing activities Decreases Net cash used by investing activities

Decreases the Net cash used by financing activities Decreases the Net change in cash and equivalents

Which of the following statements best describes the reason depreciation expense is added to net income when preparing the statement of cash flows? Multiple choice question. Depreciation Expense originally reduced net income, but it actually represents a cash inflow for the company. Depreciation Expense is not included in net income, so its cash effect must be accounted for separately. Depreciation Expense originally reduced net income, but the expense does not involve paying cash. Depreciation Expense originally reduced net income, but it is not classified as an operating activity.

Depreciation Expense originally reduced net income, but the expense does not involve paying cash.

Which of the following statements best describes the reason depreciation expense is added to net income when preparing the statement of cash flows? Multiple choice question. Depreciation Expense originally reduced net income, but it is not classified as an operating activity. Depreciation Expense is not included in net income, so its cash effect must be accounted for separately. Depreciation Expense originally reduced net income, but it actually represents a cash inflow for the company. Depreciation Expense originally reduced net income, but the expense does not involve paying cash.

Depreciation Expense originally reduced net income, but the expense does not involve paying cash.

How is the change in cash classified on the statement of cash flows? Multiple choice question. It is the sum of the operating, investing, and financing activities sections. It is found in the financing activities section of the statement. It is found in the investing activities section of the statement. It is found in the operating activities section of the statement.

It is the sum of the operating, investing, and financing activities sections.

The indirect method of preparing the statement of cash flows affects how the Blank______activities section is prepared. Multiple choice question. financing operating investing

Operating

Changes in which of the following balance sheet items relate to investing activities? (Check all that apply.) Multiple select question. Retained Earnings Property, Plant, and Equipment Short-term Investments Inventory

Property, Plant, and Equipment Short-term Investments

Which method of preparing the statement of cash flows is more widely used and why? Multiple choice question. The indirect method is because it is recommended by FASB over the direct method. The indirect method is because it is more conservative. The indirect method is because it is less expensive to implement. The direct method is because it is easier to understand.

The indirect method is because it is less expensive to implement.

When calculating net cash flow provided by operating activities, an increase in accounts payable is Blank______ net income because payments to suppliers are Blank______ than new purchases. Multiple choice question. added to; less added to; more deducted from; more deducted from; less

added to; less

When cash from operating activities is presented using the indirect method, net income must be adjusted for increases and decreases in balance sheet accounts that relate to Blank______. Multiple choice question. all current assets and liabilities all long-term assets and liabilities changes in equity amounts presented in the income statement

amounts presented in the income statement

When cash from operating activities is presented using the indirect method, net income must be adjusted for increases and decreases in balance sheet accounts that relate to Blank______. Multiple choice question. changes in equity all long-term assets and liabilities amounts presented in the income statement all current assets and liabilities

amounts presented in the income statement

Which of the following statements best describes why changes in current liabilities are classified as operating activities? Changes in current liabilities Blank______. Multiple choice question. are not classified as operating activities represent changes in debt for the company, and debt is classified as an operating activity are directly related to cash inflows and outflows arising from revenues and expenses involved in daily operations of the business represent cash paid for current assets, thus both types of accounts should be classified in the same section

are directly related to cash inflows and outflows arising from revenues and expenses involved in daily operations of the business

A decrease in accounts payable will result in a(n) " " to net cash flow from operating activities.

decrease

The complete list of items needed to prepare a statement of cash flows includes Blank______. Multiple choice question. comparative balance sheets, complete income statement, and additional data concerning accounts in investing and financing activities current year balance sheet, comparative income statements, and the retained earnings statement comparative balance sheets, retained earnings statement, and additional data concerning accounts in investing and financing activities current year balance sheet, comparative income statements, and additional data concerning accounts in investing and financing activities

comparative balance sheets, complete income statement, and additional data concerning accounts in investing and financing activities

The complete list of items needed to prepare a statement of cash flows includes Blank______. (Check all that apply.) Multiple select question. comparative statement of stockholders' equity complete income statement comparative balance sheets additional data concerning accounts in investing and financing activities

complete income statement comparative balance sheets additional data concerning accounts in investing and financing activities

When preparing the statement of cash flows using the indirect method, one of the purposes of adjusting net income for changes to certain balance sheet accounts is to Blank______. Multiple choice question. derive the correct ending balance of cash ensure that net income is properly stated convert items included in net income to cash

convert items included in net income to cash

Which of the following will be added to net income when preparing the statement of cash flows using the indirect method? (Select all that apply.) Multiple select question. decreases in operating assets decreases in operating liabilities depreciation expense increases in operating assets increases in operating liabilities

decreases in operating assets depreciation expense increases in operating liabilities

In preparing the operating activities section of a statement of cash flows using the indirect method, net income should be adjusted for Blank______. (Check all that apply.) Multiple select question. depreciation expense loss from sale of asset issuance of bonds for cash gain from sale of asset payment of a noncurrent liability

depreciation expense loss from sale of asset gain from sale of asset

In preparing the operating activities section of a statement of cash flows using the indirect method, net income should be adjusted for Blank______. (Check all that apply.) Multiple select question. depreciation expense payment of a noncurrent liability loss from sale of asset issuance of bonds for cash gain from sale of asset

depreciation expense loss from sale of asset gain from sale of asset

A $5,000 decrease in accounts payable means that cash payments were Blank______(greater/less) than purchases on account and thus the decrease is Blank______ (added to/subtracted from) net income in the operating activities section of the statement of cash flows. Multiple choice question. less; subtracted from less; added to greater; subtracted from greater; added to

greater; subtracted from

A $5,000 decrease in accrued expenses means that cash payments were Blank______(greater/less) than expenses incurred and thus the decrease is Blank______ (added to/subtracted from) net income in the operating activities section of the statement of cash flows. Multiple choice question. greater; subtracted from greater; added to less; added to less; subtracted from

greater; subtracted from

Which of the following will be added to net income when preparing the statement of cash flows using the indirect method? (Select all that apply.) Multiple select question. increases in operating liabilities increases in operating assets depreciation expense decreases in operating assets decreases in operating liabilities

increases in operating liabilities depreciation expense decreases in operating assets

A $5,000 decrease in prepaid expenses means that cash payments were Blank______(greater/less) than the amount used (expenses) and thus the decrease is Blank______ (added to/subtracted from) net income in the operating activities section of the statement of cash flows. Multiple choice question. less; subtracted from greater; subtracted from less; added to greater; added to

less; added to

The starting point for preparing the operating activities section using the indirect method is Blank______. Multiple choice question. ending cash balance net income current liabilities current assets

net income

Depreciation Expense is added back to net income when preparing the cash flow from operating activities section because depreciation represents a(n) Blank______ to net income. Multiple choice question. cash reduction increase decrease noncash reduction

noncash reduction

Depreciation Expense is added back to net income when preparing the cash flow from operating activities section because depreciation represents a(n) Blank______ to net income. Multiple choice question. decrease increase noncash reduction cash reduction

noncash reduction

Depreciation Expense is added back to net income when preparing the cash flow from operating activities section because depreciation represents a(n) Blank______ to net income. Multiple choice question. increase cash reduction decrease noncash reduction

noncash reduction

When presenting the operating activities section of the statement of cash flows, the indirect method Blank______. Multiple choice question. starts with cash and cash equivalents and adjusts for changes in noncash items starts with net income and adjusts it by eliminating the effects of noncash items reports the total cash inflow or cash outflow from each main type of transaction starts with revenues and adjusts for all cash items

starts with net income and adjusts it by eliminating the effects of noncash items

Beginning accounts receivable is $20,000, and ending accounts receivable is $30,000. The change in accounts receivable should be Blank______ net income in preparing the operating activities section of the statement of cash flows. Multiple choice question. be neither added to or subtracted from subtracted from added to

subtracted from

When using the indirect method, subtracting an increase in Accounts Receivable from net income eliminates the effect of recording credit sales Blank______. Multiple choice question. that increased net income, but did not impact cash that decreased net income, but did not impact cash that increased net income and increased cash flow that decreased net income and decreased cash flow

that increased net income, but did not impact cash