Exam 4 BA 511
Classify The Following Cash Flow as either... 1.) Sold stock investments for cash 2.) Received cash payments from customers 3.) Paid cash for wages and salaries 4.) Purchased inventories with cash 5.) Paid cash dividends 6.) Issued common stock for cash 7.)Received Cash interest on a note 8.) Paid cash interest on outstanding notes 9.) Received cash from sale of land 10.) Paid cash for property taxes on building
1.)Investing 2.) Operating 3.) Operating 4.) Operating 5.) Financing 6.) Financing 7.) Operating 8.) Operating 9.) Investing 10.) Operating
A company acquired equipment for $150,000 by signing a $150,000 note payable. The $150,000 is reported as a cash outflow in the financing activities section of the statement of cash flows.
False
A purchase of land in exchange for a long-term note payable is reported in the investing section of the statement of cash flows.
False
Applying the direct method, the gain or loss from retirement of debt is reported under cash flows from operating activities on the statement of cash flows.
False
Conversion of preferred stock to common stock is disclosed in the financing section of the statement of cash flows.
False
On a spreadsheet used to prepare the operating activities section of the statement of cash flows, depreciation expense does not require an entry in the Analysis of Changes columns because it is a noncash item
False
The cash flow on total assets ratio is affected by accounting recognition and measurement
False
The reporting of financing activities varies depending on whether the direct method or indirect method is used
False
The statement of cash flows explains how transactions and events impact the end-of-period cash balance to produce the end-of-period net income.
False
When preparing the operating activities section of the statement of cash flows using the indirect method, a decrease in accounts receivable is subtracted from net income.
False
When preparing the operating activities section of the statement of cash flows using the indirect method, depreciation expense is subtracted from net income.
False
When preparing the operating activities section of the statement of cash flows using the indirect method, revenues and gains with no cash inflows are added back to net income
False
A purchase of land in exchange for shares of stock is disclosed at the bottom of the statement of cash flows or in a note to the statement.
True
Equipment costing $200,000 with accumulated depreciation of $160,000 is sold at a loss of $10,000. This implies that $30,000 cash was received from the sale.
True
When preparing the operating activities section of the statement of cash flows using the indirect method, an increase in income taxes payable is added back to net income.
True
When preparing the operating activities section of the statement of cash flows using the indirect method, decreases in current liabilities are subtracted from net income.
True
When preparing the operating activities section of the statement of cash flows using the indirect method, decreases in noncash current assets are added back to net income
True
When preparing the operating activities section of the statement of cash flows using the indirect method, depreciation expense is added back to net income.
True
Label the following headings, line items, and notes with the numbers 1 through 13 according to their sequential order in preparing a statement of cash flows. a. Cash (and equivalents) balance at prior period-end $ b. "Cash flows from financing activities" title. c. Net cash provided (used) by investing activities $ d. Cash (and equivalents) balance at current period-end $ e. "For period Ended date" heading f. "Cash flows from investing activities" title g. Company name h. "Cash flows from operating activities" title i. "Statement of Cash Flows" heading j. Schedule or note disclosure of noncash investing and financing transactions k. Net cash provided (used) by operating activities $ l. Net increase (decrease) in cash $ m. Net cash provided (used) by financing activities $
a. 11 b. 8 c. 7 d. 12 e. 3 f. 6 g. 1 h. 4 i. 2 j. 13 k. 5 l. 10 m. 9
