A cash flow statement is typically prepared _____________________.
before the balance sheet is prepared 0.0%
after the balance sheet is prepared but before the income statement is prepared 0.0%
after the income statement is prepared but before the balance sheet is prepared 0.0%
after both the balance sheet and the income statement are prepared 100.0%
A cash payment for land acquisition would appear in which of the following sections of the cash flow statement?
Operating section 0.0%
Investing section 100.0%
Financing section 0.0%
It would not appear on the statement. 0.0%
A payment made from accounts payable will cause cash to ______________ .
increase 0.0%
decrease 100.0%
show no change 0.0%
The effect on cash cannot be determined based on given information. 0.0%
Accounts receivable that increased during the year would appear in which of the following sections of the cash flow statement?
Operating section 100.0%
Investing section 0.0%
Financing section 0.0%
It would not appear on the statement. 0.0%
Accruing an income tax liability will cause cash to ______________ .
increase 0.0%
decrease 0.0%
show no change 100.0%
The effect on cash cannot be determined based on given information. 0.0%
Acquisition of treasury stock would be shown _____________________.
as an adjustment to net income for the difference in price paid versus the original issue price 0.0%
in the financing section 100.0%
in the investing section 0.0%
None of the above 0.0%
Amortized discount on bonds payable would appear in which of the following sections of the cash flow statement?
Operating section 100.0%
Investing section 0.0%
Financing section 0.0%
It would not appear on the statement. 0.0%
An amortization of a bond discount would be shown __________________.
as an add-back to net income when determining cash flow from operations 100.0%
as a deduction from net income when determining cash flow from operations 0.0%
in the financing section 0.0%
None of the above 0.0%
An increase in the accounts payable balance would appear in which of the following sections of the cash flow statement?
Operating section 100.0%
Investing section 0.0%
Financing section 0.0%
It would not appear on the statement 0.0%
An investment in the stock of another company would appear in which of the following sections of the cash flow statement?
Operating section 0.0%
Investing section 100.0%
Financing section 0.0%
It would not appear on the statement. 0.0%
At the beginning and end of 2007, XYZ Company reported the following balances for Bonds Payable: Jan 1: $100,000 Dec 31: $140,000 In addition, $60,000 In bonds was retired In 2007. Given the abov...
$100,000 100.0%
$20,000 0.0%
$160,000 0.0%
$180,000 0.0%
Cash borrowed from a bank by issuing a short-term note payable would appear in which of the following sections of the cash flow statement?
Operating section 0.0%
Investing section 0.0%
Financing section 100.0%
It would not appear on the statement. 0.0%
Cash paid for land would be shown as ________________.
cash flow from operations 0.0%
cash flow from investing 100.0%
cash flow from financing 0.0%
a non-cash transaction 0.0%
Cash received from sale of investment would be shown on a cash flow statement as ___________.
cash flow from operations 0.0%
cash flow from investing 100.0%
cash flow from financing 0.0%
a non-cash transaction 0.0%
Collecting receivables will cause cash to ______________ .
increase 100.0%
decrease 0.0%
show no change 0.0%
The effect on cash cannot be determined based on given information. 0.0%
Declaring dividends will cause cash to ______________ .
increase 0.0%
decrease 0.0%
show no change 100.0%
The effect on cash cannot be determined based on given information. 0.0%
Deferred income tax payable that increased during the year would appear in which of the following sections of the cash flow statement?
Operating section 100.0%
Investing section 0.0%
Financing section 0.0%
It would not appear on the statement. 0.0%
Depreciation recorded on equipment would appear in which of the following sections of the cash flow statement?
Operating section 100.0%
Investing section 0.0%
Financing section 0.0%
It would not appear on the statement. 0.0%
Dividends paid for the year would appear in which of the following sections of the cash flow statement?
Operating section 0.0%
Investing section 0.0%
Financing section 100.0%
It would not appear on the statement. 0.0%
During 2007, XYZ Company experienced the following changes: Current liabilities: $75,000 increase Non-current liabilities: $45,000 decrease Owners' equity: $51,000 decrease Non-current assets: $42...
($57,000) 0.0%
$30,000 0.0%
$39,000 0.0%
($81,000) 100.0%
Equity in the undistributed earnings of a recognized affiliate would appear in which of the following sections of the cash flow statement?
Operating section 0.0%
Investing section 0.0%
Financing section 100.0%
It would not appear on the statement. 0.0%
Equity income from an affiliate would be shown _____________________.
as an add-back to net income in the operations section 0.0%
as a deduction from net income in the operations section 100.0%
in the investing section 0.0%
None of the above 0.0%
In 2007, XYZ Company had a net income of $100,000 and reported the following account changes on its balance sheet: Accounts Receivable: $6,000 increase Accounts Payable: $2,000 increase Building: ...
$100,000 0.0%
$99,000 100.0%
$119,000 0.0%
$103,000 0.0%
In 2007, XYZ Company had a net income of $150,000 and reported the following: Depreciation expense: $21,000 Issuance of debt: $120,000 Loss on sale of equipment: $23,000 Purchase of building: $110...
$182,000 100.0%
$171,000 0.0%
$159,000 0.0%
$138,000 0.0%
In 2007, XYZ Company had a net loss of $160,000 and reported the following: Dividends paid: $40,000 Depreciation expense: $30,000 Increase in accounts payable: $15,000 Issuance of stock: $100,000 ...
($115,000) 100.0%
$205,000 0.0%
($75,000) 0.0%
$65,000 0.0%
($105,000) 100.0%
$10,000 0.0%
$215,000 0.0%
($165,000) 0.0%
In determining cash flow from operations, which of the following would be added to net income?
Increased accounts receivable 0.0%
Increased merchandise inventory 0.0%
Increased accounts payable 100.0%
Decreased notes payable to suppliers 0.0%
In determining cash flow from operations, which of the following would be an add-back to net income?
Gain on sale of building 0.0%
Loss on sale of building 100.0%
Decrease in inventories 0.0%
All of the above 0.0%
In most countries, the preparation of a __________________ is a common practice.
cash flow statement 100.0%
financing activities statement 0.0%
investing activities statement 0.0%
statement of sources and uses of funds 0.0%
Issuing ten-year bonds will cause cash to ______________ .
increase 100.0%
decrease 0.0%
show no change 0.0%
The effect on cash cannot be determined based on given information. 0.0%
Land acquired by issuing preferred stock would appear in which of the following sections of the cash flow statement?
Operating section 0.0%
Investing section 0.0%
Financing section 0.0%
It would not appear on the statement. 100.0%
Long-term investments sold for cash with a recognized gain would appear in which of the following sections of the cash flow statement?
Operating section 100.0%
Investing section 0.0%
Financing section 0.0%
It would not appear on the statement. 0.0%
New equipment purchased by issuing a long-term note payable would appear in which of the following sections of the cash flow statement?
Operating section 0.0%
Investing section 100.0%
Financing section 0.0%
It would not appear on the statement. 0.0%
On a cash flow statement, depreciation expense ________________.
provides cash from operations 0.0%
should be added to net income when determining cash provided by operations 100.0%
should be deducted from net income when determining cash provided by operations 0.0%
is an example of cash expense 0.0%
On their income statement, XYZ Company reported $600,000 in sales, $320,000 in depreciation expense, $60,000 in income taxes, and $100,000 in other expenses. In addition, $80,000 of common stock wa...
$20,000 0.0%
$100,000 0.0%
$420,000 0.0%
$440,000 100.0%
Paying cash to retire preferred stock will cause cash to ______________ .
increase 0.0%
decrease 100.0%
show no change 0.0%
The effect on cash cannot be determined based on given information. 0.0%
Paying previously declared dividends will cause cash to ______________ .
increase 0.0%
decrease 100.0%
show no change 0.0%
The effect on cash cannot be determined based on given information. 0.0%
Pre-paying a one-year insurance policy will cause cash to ______________ .
increase 0.0%
decrease 100.0%
show no change 0.0%
The effect on cash cannot be determined based on given information. 0.0%
Preferred stock converted into common stock would appear in which of the following sections of the cash flow statement?
Operating section 0.0%
Investing section 0.0%
Financing section 100.0%
It would not appear on the statement. 0.0%
Preferred stock issued for cash would appear in which of the following sections of the cash flow statement?
Operating section 0.0%
Investing section 0.0%
Financing section 100.0%
It would not appear on the statement. 0.0%
Prepaid rent that increased during the year would appear in which of the following sections of the cash flow statement?
Operating section 100.0%
Investing section 0.0%
Financing section 0.0%
It would not appear on the statement. 0.0%
Purchasing inventory with a check will cause cash to ______________ .
increase 0%
decrease 0%
show no change 0%
The effect on cash cannot be determined based on given information. 0%
Recording a depreciation expense will cause cash to ______________ .
increase 0.0%
decrease 100.0%
show no change 0.0%
The effect on cash cannot be determined based on given information. 0.0%
Salaries paid during the year would appear in which of the following sections of the cash flow statement?
Operating section 100.0%
Investing section 0.0%
Financing section 0.0%
It would not appear on the statement. 0.0%
The acquisition of a building and/or land by entering into a lease that meets the capital lease criteria would appear in which of the following sections of the cash flow statement?
Operating section 0.0%
Investing section 100.0%
Financing section 0.0%
It would not appear on the statement. 0.0%
The acquisition of a patent would be shown __________________.
as an add-back to net income in the operations section 0.0%
as a deduction from net income in the operations section 0.0%
in the investing section 100.0%
None of the above 0.0%
The amortization of a recorded patent would appear in which of the following sections of the cash flow statement?
Operating section 100.0%
Investing section 0.0%
Financing section 0.0%
It would not appear on the statement. 0.0%
The major components of a cash flow statement are ________________________.
cash flow from operations, cash flow from investing, and cash flow from financing 100.0%
cash flow from operations, other sources of cash, and other uses of cash 0.0%
sources of cash from investments, application of cash for financing activities, and other cash transactions 0.0%
cash received from customers, cash paid to customers, and other sources of cash 0.0%
The most popular method of presenting cash from operations in a cash flow statement is the _________________.
direct method 0.0%
operations method 0.0%
indirect method 100.0%
funds method 0.0%
The sale of equipment for cash with a recognized loss would appear in which of the following sections of the cash flow statement?
Operating section 100.0%
Investing section 0.0%
Financing section 0.0%
It would not appear on the statement. 0.0%
The use of a bond sinking fund to retire a long-term debt at maturity would appear in which of the following sections of the cash flow statement?
Operating section 0.0%
Investing section 0.0%
Financing section 100.0%
It would not appear on the statement. 0.0%
Treasury stock purchased for cash would appear in which of the following sections of the cash flow statement?
Operating section 0.0%
Investing section 0.0%
Financing section 100.0%
It would not appear on the statement. 0.0%
Treasury stock sold for an amount greater than its repurchase price would appear in which of the following sections of the cash flow statement?
Operating section 0.0%
Investing section 0.0%
Financing section 100.0%
It would not appear on the statement. 0.0%
Unearned revenue that had been reduced during the year would appear in which of the following sections of the cash flow statement?
Operating section 100.0%
Investing section 0.0%
Financing section 0.0%
It would not appear on the statement. 0.0%
Warranties payable that increased during the year would appear in which of the following sections of the cash flow statement?
Operating section 0.0%
Investing section 0.0%
Financing section 0.0%
It would not appear on the statement. 100.0%
When determining cash flow from operations, which of the following would be a deduction from net income?
Depreciation expense 0.0%
Increased accounts receivable 100.0%
Decreased accounts receivable 0.0%
Increased accounts payable 0.0%
When determining cash flow from operations, which of the following would be added back to net income?
Depreciation expense 0.0%
Amortization of patent 0.0%
Loss on sale of marketable securities 0.0%
All of the above 100.0%
When determining cash flow from operations, which of the following would NOT be added back to net income?
Loss on sale of equipment 0.0%
Equity in affiliate's losses 0.0%
Amortization of bond premium 100.0%
All of the above 0.0%
When determining cash flow from operations, which of the following would NOT be deducted from net income?
Increase in accounts receivable 0.0%
Loss on sale of equipment 50.0%
Amortization of bond premium 50.0%
Decrease in accounts payable 0.0%
Gain on sale of a building 0.0%
Gain on sale of equipment 0.0%
Gain on sale of marketable securities 100.0%
All of the above 0.0%
When preparing cash flow statements, the practice of presenting cash from operations by listing all cash-generating revenues followed by all cash expenses is called the ______________.
direct method 100.0%
operations method 0.0%
indirect method 0.0%
funds method 0.0%
Which of the following is NOT a characteristic of growing firms?
Significant increase in inventories 0.0%
Reporting in the cash flow statement a deduction adjustment to net income for change in deferred taxes 0.0%
Significant increase in accounts receivable 0.0%
All of the above 100.0%
Which of the following statements about depreciation expense is true?
Depreciation expense increases the expense for a period but does not use cash. 0.0%
When determining funds from operations, depreciation expense that had originally been subtracted in computing net income is added back to net income, but it is not a use of cash. 0.0%
Depreciation expense is not a source of funds. 0.0%
All of the above statements are true. 100.0%
Which of the following statements does NOT illustrate a proper interpretation of information in a cash flow statement?
Capital-intensive firms would likely show a substantially smaller add-back to net income for depreciation than service firms would show. 0.0%
The product life cycle concept provides useful insights into the relation between cash flows from operating, investing, and financing activities. 0.0%
The adjustments for changes in operating working capital accounts depend in part on a firm's rate of growth. 0.0%
All of the above 100.0%
Which of the following statements expresses the objective of a cash flow statement?
To report the amount of cash flow from a firm's operating activities 0.0%
To report the principal inflows and outflows of cash from investing activities 0.0%
To report the principal inflows and outflows of cash from financing activities 0.0%
All of the above 100.0%
Which of the following transactions would be shown as a cash flow from financing?
Cash paid for investments acquisition 0.0%
Cash received from sale of property, plant, and equipment 0.0%
Cash received from customers 0.0%
Cash paid for dividends 100.0%
Which of the following transactions would be shown on a cash flow statement, but does not affect cash?
Sale of bonds for cash 0.0%
Exchange of land for stock 100.0%
Collection of customer accounts 0.0%
Payment of dividends to owners 0.0%
Which of the following typically happens during the growth phase of a product's life cycle?
Cash outflow exceeds cash inflow from operations. 0.0%
Cash outflow exceeds cash inflow from investing activities. 100.0%
Cash inflow exceeds cash outflow from financing activities. 0.0%
All of the above 0.0%
Which of the following typically happens during the introduction phase of a product's life cycle?
Cash outflow exceeds cash inflow from operations. 0.0%
Cash outflow exceeds cash inflow from investing activities. 100.0%
Cash inflow exceeds cash outflow from financing activities. 0.0%
All of the above 0.0%
Which of the following typically happens during the maturation phase of a product's life cycle?
Cash outflow exceeds cash inflow from operations. 0.0%
Cash outflow exceeds cash inflow from investing activities. 100.0%
Cash inflow exceeds cash outflow from financing activities. 0.0%
All of the above 0.0%
Which of the following would be included in the investing section of a cash flow statement?
Proceeds from sale of equipment 0.0%
Proceeds from sale of long-term investments 0.0%
Proceeds from sale of marketable securities 0.0%
All of the above would be included in the investing section. 100.0%
Which of the following would be shown in the financing section of a cash flow statement?
Long-term bonds payable issued 100.0%
Long-term notes payable issued 0.0%
Short-term notes payable issued 0.0%
All of the above 0.0%
Which of the following would be shown in the investing section of a cash flow statement?
Retirement of long-term debt 0.0%
Retirement of preferred stock 0.0%
Acquisition of treasury stock 0.0%
None of the above 100.0%
Acquisition of equipment through a capital lease 100.0%
None of the above 0.0%
Which of the following would NOT be shown in the investing section of a cash flow statement?
Acquisition of equipment 0.0%
Acquisition of a building 0.0%
Proceeds from sale of equipment 0.0%
All of the above are shown in the investing section of a cash flow statement 100.0%
XYZ Company reported the following information on its balance sheet: 01/01/07 Building: $800,000 Accumulated Depreciation: $200,000 12/31/07 Building: $785,000 Accumulated Depreciation: $225,000 I...
No building was sold in 2007. 0%
Yes, but its cost cannot be determined. 0%
Yes, and its original cost was $85,000. 0%
Yes, and its original cost was $115,000. 0%
XYZ reported balances in the Accumulated Depreciation account of $130,000 on 01/01/07 and $120,000 on 12/31/07. During 2007, an asset costing $100,000 (with an accumulated depreciation of $80,000) ...
$10,000 0.0%
$90,000 100.0%
$110,000 0.0%
$70,000 0.0%