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When using a spreadsheet to prepare the statement of cash flows, a decrease in accounts payable is entered in the Analysis of Changes column with a debit in the statement of cash flows section and a credit in the balance sheet section.

A) True
B) False

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Use the following information about the current year's operations of a company to calculate the cash paid for merchandise. Use the following information about the current year's operations of a company to calculate the cash paid for merchandise. A) $522,800 B) $533,600 C) $528,200 D) $536,000 E) $543,800


A) $522,800
B) $533,600
C) $528,200
D) $536,000
E) $543,800

F) A) and B)
G) A) and C)

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What are the five usual steps involved in the preparation of the statement of cash flows?

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The preparation of the statement of cash...

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When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from financing activities generally affect:


A) Net income, current assets and current liabilities
B) Noncurrent assets
C) Noncurrent liability and the equity accounts
D) Both noncurrent assets and noncurrent liabilities
E) Equity accounts only

F) B) and D)
G) A) and E)

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Define and discuss the differences between operating, investing and financing activities.

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Operating activities involve the day-to-...

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Managers only use the cash flow statement to evaluate the net cash increase or decrease and do not pay much attention to the details of cash flows from operating activities, cash flows from investing activities and cash flows from financing activities.

A) True
B) False

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The appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is:


A) Operating activities
B) Financing activities
C) Investing activities
D) Schedule of noncash investing or financing activity
E) None of these as this is not reported on the statement of cash flows

F) A) and B)
G) All of the above

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Which one of the following is representative of typical cash flows from operating activities?


A) Proceeds from collecting the principal amount of loans
B) Repayment of principal on loans
C) Proceeds from the issuance of bonds and notes payable
D) Payments by a merchandiser to acquire equity securities of other companies
E) Receipts of cash sales

F) B) and D)
G) C) and E)

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Cash flows from selling trading securities are reported in the statement of cash flows as part of:


A) Operating activities
B) Financing activities
C) Investing activities
D) Noncash activities
E) None of these as this is not reported in the statement of cash flows

F) A) and C)
G) B) and E)

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Kodak reported assets of $13,362 million at January 1 and $13,369 million as of December 31 of the current year. Kodak's net cash flows from operations was $2,204 million. Calculate Kodak's cash flow on total assets ratio.

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$2,204/[($...

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The primary purpose of the statement of cash flows is to report all major cash receipts (inflows) and cash payments (outflows) during a period.

A) True
B) False

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Spirit Company, a merchandiser, recently completed its 2010 calendar year. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's balance sheet and income statement follow: Spirit Company, a merchandiser, recently completed its 2010 calendar year. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's balance sheet and income statement follow: Additional Information on Year 2010 Transactions What is the net cash flows provided (used) by investing activities? A) ($23,375) B) $23,375 C) $46,500 D) ($35,000) E) $35,000 Spirit Company, a merchandiser, recently completed its 2010 calendar year. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's balance sheet and income statement follow: Additional Information on Year 2010 Transactions What is the net cash flows provided (used) by investing activities? A) ($23,375) B) $23,375 C) $46,500 D) ($35,000) E) $35,000 Additional Information on Year 2010 Transactions Spirit Company, a merchandiser, recently completed its 2010 calendar year. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's balance sheet and income statement follow: Additional Information on Year 2010 Transactions What is the net cash flows provided (used) by investing activities? A) ($23,375) B) $23,375 C) $46,500 D) ($35,000) E) $35,000 What is the net cash flows provided (used) by investing activities?


A) ($23,375)
B) $23,375
C) $46,500
D) ($35,000)
E) $35,000

F) A) and B)
G) All of the above

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Accounting standards:


A) Allow companies to omit the statement of cash flows from a complete set of financial statements if cash is an insignificant asset
B) Require that companies omit the statement of cash flows from a complete set of financial statements if the company has no investing activities
C) Require that companies include a statement of cash flows in a complete set of financial statements
D) Allow companies to include the statement of cash flows in a complete set of financial statements if the cash balance makes up more than 50% of the current assets
E) Allow companies to omit the statement of cash flows from a complete set of financial statements if the company has no financing activities

F) None of the above
G) B) and D)

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A company had net cash flows from operations of $120,000, total cash flows of $500,000 and average total assets of $2,500,000. The cash flow on total assets ratio equals:


A) 4.8%
B) 5.0%
C) 20.0%
D) 20.8%
E) 24.0%

F) D) and E)
G) B) and D)

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The full disclosure principle requires that noncash investing and financing activities be disclosed as part of the statement of cash flows.

A) True
B) False

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Use the following information to calculate cash paid for wages and salaries: Use the following information to calculate cash paid for wages and salaries: A) $157,400 B) $163,800 C) $168,000 D) $172,200 E) $174,400


A) $157,400
B) $163,800
C) $168,000
D) $172,200
E) $174,400

F) A) and D)
G) C) and D)

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Given the following information, determine the amount of cash flows from investing and financing activities. Given the following information, determine the amount of cash flows from investing and financing activities. A) B) C) D) E)


A) Given the following information, determine the amount of cash flows from investing and financing activities. A) B) C) D) E)
B) Given the following information, determine the amount of cash flows from investing and financing activities. A) B) C) D) E)
C) Given the following information, determine the amount of cash flows from investing and financing activities. A) B) C) D) E)
D) Given the following information, determine the amount of cash flows from investing and financing activities. A) B) C) D) E)
E) Given the following information, determine the amount of cash flows from investing and financing activities. A) B) C) D) E)

F) B) and E)
G) B) and D)

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Which of the following transactions or events should be reported as a source of cash from operating activities when using the direct method?


A) Credit sales
B) Cash collections from customers
C) Depreciation expense
D) Cash received from the sale of a building
E) Cash received from the sale of treasury stock

F) A) and B)
G) All of the above

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A company reported operating cash flows of $57,000 and average total assets of $962,000. Calculate the company's cash flow on total assets ratio.

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$57,000/$9...

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The direct method for the preparation of the operating activities section of the statement of cash flows:


A) Separately lists each major item of operating cash receipts and cash payments
B) Reports adjustments to reconcile net income to net cash provided or used by operating activities in the statement
C) Reports a different amount of cash flows from operations than if the indirect method is used
D) Is required if the company is a merchandiser
E) Is required by the FASB

F) C) and E)
G) A) and C)

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