Chapter 13 Quiz- Principals of Financial Accounting

If a gain of $7,000 results from selling (for cash) office equipment having a book value of $55,000, the total amount reported in the Cash Flows from Investing Activities section of the statement of cash flows is a. $62,000. b. $55,000. c. $48,000. d. $7,000.

A

In preparing the Cash Flows from Investing Activities section of the statement of cash flows, which type of account is analyzed for changes? a. Long-term assets b. Stockholders' equity c. Current assets d. Current liabilities

A

The ending figure on the statement of cash flows should match what figure on the balance sheet? a. Cash balance b. Total stockholders' equity c. Retained earnings balance d. Total assets

A

Which of the following should be subtracted from net income in calculating net cash flow from operating activities using the indirect method? a. A gain on a sale of a building b. A loss on a sale of equipment c. A decrease in accounts receivable d. An increase in accounts payable

A

Cash received through the sale of long-term investments would be reported in the statement of cash flows as a a. separate schedule. b. cash inflow in the Investing Activities section. c. cash inflow in the Operating Activities section. d. cash inflow in the Financing Activities section.

B

Dividends declared during the year were $48,000. The dividends payable account increased by $4,000. Which of the following will appear in the Financing Activities section of the statement of cash flows? a. Cash paid for dividends, $(52,000) b. Cash paid for dividends, $(44,000) c. Dividends declared, $(48,000) d. Change in dividends payable, $4,000

B

Step 1 of reconciling net income to net cash flow from operating activities is to a. subtract gains or add losses from investing activities. b. add depreciation expense. c. subtract depreciation expense. d. add gains or subtract losses from investing activities.

B

The following selected data are from a recent statement of cash flows: Net cash flow from operating activities $ 35,000 Net cash flow used for investing activities (20,000) Net cash flow used for financing activities 60,000 Ending cash balance 45,000 What was the ending cash balance? a. $160,000 b. $120,000 c. $30,000 d. $75,000

B

Which of the following would appear in the Cash Flows from Investing Activities section of the statement of cash flows? a. Cash received from stock issued b. Depreciation expense on equipment c. Cash received from bonds payable d. Cash paid for equipment

D

Which of the following would indicate a cash outflow to appear in the Financing Activities section of the statement of cash flows? a. Increase in retained earnings account b. Increase in paid-in capital account c. Increase in common stock account d. Increase in treasury stock account

D

The net income reported on the income statement for the current year was $275,000. Depreciation recorded on fixed assets and amortization of patents for the year were $30,000 and $4,000, respectively. Balances of current asset and current liability accounts at the end and at the beginning of the year are as follows: End Beginning Cash $ 50,000 $ 60,000 Accounts receivable 102,000 108,000 Inventory 88,000 93,000 Prepaid expenses 8,500 6,500 Accounts payable (merchandise creditors) 95,000 89,000 What is the net cash flow from operating activities reported on the statement of cash flows prepared by the indirect method? a. $328,000 b. $324,000 c. $306,000 d. $256,000

B

Which of the following is not a cash flow element that would be found on the statement of cash flows? a. Ending cash balance b. Free cash flow c. Net cash flow from operating activities d. Change in cash

B

In preparing the Cash Flows from Financing Activities section of the statement of cash flows, which types of accounts are analyzed for changes? a. Long-term assets b. All liabilities and stockholders' equity c. Long-term liabilities and stockholders' equity d. Current liabilities and stockholders' equity

C

Which of the following is reported on the statement of cash flows? a. Changes in retained earnings b. Total changes in stockholders' equity c. Cash flows from investing activities d. Total assets

C

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method? a. An increase in accounts receivable b. Common stock dividends declared and paid c. A decrease in inventory d. A decrease in accounts payable

C

Which of the following would indicate a cash inflow to appear in the Financing Activities section of the statement of cash flows? a. Decrease in dividends payable account b. Decrease in retained earnings account c. Increase in common stock account d. Increase in treasury stock account

C

Cash dividends paid would be shown on the statement of cash flows under __________ activities. a. operating b. directing c. investing d. financing

D

Cash proceeds of $72,000 include a $12,000 gain on the sale of land and the $60,000 cost (book value) of the land. Which of the following is true? a. The book value does not appear as a cash inflow or outflow anywhere on the statement. b. The entire cash proceeds appear as a cash inflow in the Investing Activities section. c. The $12,000 gain is deducted from net income in the Operating Activities section. d. All of these choices are correct.

D

Which of the following cash flow elements should be presented first on the statement of cash flows? a. Ending cash balance b. Cash flows from financing activities c. Beginning cash balance d. Cash flows from operating activities

D