FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 11: Statement of Cash Flows

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

Multiple Choice

Review LaterAdd Note

Review Later

Cash flows from investing activities do not include cash flows from:

A) Lending.
B) The sale of equipment.
C) Borrowing.

D) None of the above
E) B) and C)

Correct Answer

verified

Show Answer

Question 62

Multiple Choice

Review LaterAdd Note

Review Later

In preparing a statement of cash flows under the indirect method,an increase in accounts payable would be reported as a(n) :

A) Addition to net income in the operating activities section.
B) Deduction from net income in the operating activities section.
C) Financing activity.

D) B) and C)
E) A) and C)

Correct Answer

verified

Show Answer

Question 63

True/False

Review LaterAdd Note

Under the indirect method,a decrease in accounts receivable is added to net income to arrive at net cash flows from operating activities.

Cash return on assets can be separated to examine two important business strategies: cash flow to sales and asset turnover.

Which of the following items is reported in the operating section of the statement of cash flows using the direct method?

Which of the following is not correct about the statement of cash flows?

The balance sheet of Sound Designs reports total assets of $750,000 and $800,000 at the beginning and end of the year,respectively.Sales revenues are $1.5 million ($1.2 million in the previous year) ,net income is $150,000,and net cash flows from operating activities are $175,000.What is Sound Designs' cash return on assets?

We report the actual amount of cash proceeds received from the sale of land as a cash inflow from investing activities.

A gain on the sale of long-term assets is added back to net income to arrive at net cash flows from operating activities under the indirect method.A gain on the sale of long-term assets is subtracted from net income to arrive at net cash flows from operating activities under the indirect method.

Financing activities would include cash paid for:

We record dividends paid as a financing activity.

Operating cash flows exclude:

The following information pertains to Alpha Computing at the end of 2018: Alpha Computing's Retained Earnings account had a zero balance at the beginning of 2018.What amount of dividends did the company pay in 2018? $\begin{array} { | l r | } \hline \text { Assets } & \$ 970,000 \\\hline \text { Liabilities } & \$ 560,000 \\\hline \text { Net Income } & \$ 90,000 \\\hline \text { Common Stock } & \$ 360,000 \\\hline\end{array}$

The balance sheet of Computer World reports total assets of $350,000 and $450,000 at the beginning and end of the year,respectively.Sales revenues are $800,000,net income is $100,000,and net cash flows from operating activities are $150,000.What is Computer World's cash flow to sales?

The balance sheet of Tech Track reports total assets of $400,000 and $500,000 at the beginning and end of the year,respectively.Sales revenues are $1,080,000($800,000 in the previous year) ,net income is $40,000,and net cash flows from operating activities are $50,000.How does Tech Track's asset turnover compare to the industry average of 2.4 times?

During the year,Next Tec Corp.had the following cash flows: receipt from customers,$10,000;receipt from the bank for long-term borrowing,$6,000;payment to suppliers,$5,000;payment of dividends,$1,000,payment to workers,$2,000;and payment for machinery,$8,000.What amount would be reported for net financing cash flows on the Statement of Cash Flows?

The sale of land is reported in the operating section of the statement of cash flows.The sale of land is reported in the investing section of the statement of cash flows.

We calculate cash return on assets as

Shively Mfg.Co.sold land costing $10,000 for $12,000.Shively would report:

Under the indirect method,an increase in inventory is added to net income and a decrease in inventory is subtracted from net income to arrive at net cash flows from operating activities.We would subtract an increase in inventory and add a decrease in inventory to net income to arrive at net cash flows from operating activities under the indirect method.