Question 1

In computing cash payments for income taxes, a decrease in income taxes payable is ______________ to (from) income tax expense.

Accepted Answer

The answer of In computing cash payments for income taxes,...

Question 2

For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the direct method.

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The answer of For each of the following items, indicate...

Question 3

In computing cash payments for operating expenses, a decrease in prepaid expenses is ______________ and an increase in accrued expenses payable is ______________ to (from) operating expenses, exclusive of depreciation.

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The answer of In computing cash payments for operating expenses,...

Question 4

The statement of cash flows is the only required financial statement that is not prepared from an adjusted trial balance. (a) What are the sources of information for preparing a statement of cash flows? (b) Explain how the accrual basis of accounting affects the statement of cash flows.

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Question 5

The sale of equipment at less than its book value is a(n) ______________ of cash that is reported in the ______________ activities section.

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The answer of The sale of equipment at less than...

Question 6

Under the direct method, noncash charges, such as depreciation, are _______________ in the statement of cash flows.

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The answer of Under the direct method, noncash charges, such...

Question 7

The cash effects of selling goods and services appears in the ______________ activities section of a statement of cash flows.

Accepted Answer

The answer of The cash effects of selling goods and...

Question 8

Net income from operations is generally not the same as cash provided from operations because revenues and expenses are recognized in the income statement on the ______________ basis.

Accepted Answer

The answer of Net income from operations is generally not...

Question 9

Cost of goods sold for the year amounted to $130,000, and during the year, accounts payable ______________ by $9,000 and inventory ______________ by $5,000 resulting in cash paid to suppliers of $116,000.

Accepted Answer

The answer of Cost of goods sold for the year...

Question 10

The operating activities section of the statement of cash flows may be prepared using the ______________ method or the ______________ method.

Accepted Answer

The answer of The operating activities section of the statement...

Question 11

Dredd Company has begun a worksheet for preparing a statement of cash flows. The following additional information is provided:
1. Cash dividends of $8,000 were paid during the year.
2. Land which originally cost $60,000 was sold for $52,000.
3. Common stock was issued at par value for cash.
Instructions
Complete the worksheet for Dredd Company.

Accepted Answer

The answer of Dredd Company has begun a worksheet for...

Question 12

If accounts receivable increase during a period, revenues on an accrual basis are ______________ than revenues on a cash basis.

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Question 13

For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the indirect method.

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The answer of For each of the following items, indicate...

Question 14

Distinguish among the three types of activities reported in the statement of cash flows
The three activities are:

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Question 15

Free _______________ equals cash provided by operations less capital expenditures and cash dividends.

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Question 16

Using the indirect approach, noncash charges in the income statement are ______________ to net income and noncash credits are ______________ to compute cash provided by operations.

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Question 17

A statement of cash flows summarizes the operating, ____________, and ___________ activities of an entity.

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Question 18

Why is the statement of cash flows useful?

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Question 19

Under the direct method, the two largest classes of items in the operating activities section for a merchandising company are cash ________________________ and cash _________________________.

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The answer of Under the direct method, the two largest...

Question 20

The financial statements of Lowz Company appear below:   The following additional data were provided:
1. Dividends declared and paid were $35,000.
2. During the year, equipment was sold for $17,000 cash. This equipment cost $28,000 originally and had a book value of $17,000 at the time of sale.
3. All depreciation expense is in the operating expenses.
4. All sales and purchases are on account.
5. Accounts payable pertain to merchandise suppliers.
6. All operating expenses except for depreciation were paid in cash.
Instructions
Prepare a statement of cash flows for Lowz Company using the direct method.

Accepted Answer

The answer of The financial statements of Lowz Company appear...

Quiz 12: Statement of Cash Flows

In computing cash payments for income taxes, a decrease in income taxes payable is ______________ to (from) income tax expense.

For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the direct method.

In computing cash payments for operating expenses, a decrease in prepaid expenses is and an increase in accrued expenses payable is to (from) operating expenses, exclusive of depreciation.

The statement of cash flows is the only required financial statement that is not prepared from an adjusted trial balance. (a) What are the sources of information for preparing a statement of cash flows? (b) Explain how the accrual basis of accounting affects the statement of cash flows.

The sale of equipment at less than its book value is a(n) of cash that is reported in the activities section.

Under the direct method, noncash charges, such as depreciation, are _______________ in the statement of cash flows.

The cash effects of selling goods and services appears in the ______________ activities section of a statement of cash flows.

Net income from operations is generally not the same as cash provided from operations because revenues and expenses are recognized in the income statement on the ______________ basis.

Cost of goods sold for the year amounted to $130,000, and during the year, accounts payable by $9,000 and inventory by $5,000 resulting in cash paid to suppliers of $116,000.

The operating activities section of the statement of cash flows may be prepared using the method or the method.

If accounts receivable increase during a period, revenues on an accrual basis are ______________ than revenues on a cash basis.

For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the indirect method.

Distinguish among the three types of activities reported in the statement of cash flows The three activities are:

Free _______________ equals cash provided by operations less capital expenditures and cash dividends.

Using the indirect approach, noncash charges in the income statement are to net income and noncash credits are to compute cash provided by operations.

A statement of cash flows summarizes the operating, __, and _ activities of an entity.

Why is the statement of cash flows useful?

Under the direct method, the two largest classes of items in the operating activities section for a merchandising company are cash and cash _.