Question 1

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

Accepted Answer

The answer of A statement of cash flows summarizes the...

Question 2

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 3

The income statement of Redman Inc. for the year ended December 31, 2010, reported the following condensed information:  
Redman's balance sheet contained the following comparative data at December 31:  
Redman has no depreciable assets. Accounts payable pertains to operating expenses.
Instructions
Prepare the operating activities section of the statement of cash flows using the direct method.

Accepted Answer

The answer of The income statement of Redman Inc. for...

Question 4

The income statement for Javier Company showed cost of goods sold of $85,000 and operating expenses of $55,000. The comparative balance sheets for the year show that inventory decreased $3,000, prepaid expenses increased $7,000, accounts payable increased $4,000, and accrued expenses payable decreased $5,000.
Instructions
Compute (a) cash payments to suppliers and (b) cash payments for operating expenses using the direct method.

Accepted Answer

The answer of The income statement for Javier Company showed...

Question 5

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.

Accepted Answer

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

Question 6

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

Accepted Answer

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

Question 7

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 8

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

Accepted Answer

The answer of Free _______________ equals cash provided by operations...

Question 9

The general ledger of Lopez Company provides the following information:  
The company's net sales for the year was $2,200,000 and cost of goods sold amounted to $1,500,000.
Instructions
Compute the following:
(a) Cash receipts from customers.
(b) Cash payments to suppliers.

Accepted Answer

The answer of The general ledger of Lopez Company provides...

Question 10

Banner Company had total operating expenses of $160,000 in 2010, which included Depreciation Expense of $25,000. Also, during 2010, prepaid expenses increased by $5,000 and accrued expenses decreased by $6,700.
Instructions
Calculate the amount of cash payments for operating expenses in 2010 using the direct method.

Accepted Answer

The answer of Banner Company had total operating expenses of...

Question 11

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

Accepted Answer

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

Question 12

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 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.
A. Added to net income
B. Deducted from net income
C. Cash outflow-investing activity
D. Cash inflow-investing activity
E. Cash outflow-financing activity
F. Cash inflow-financing activity
G. Significant noncash investing and financing activity
____ 1. Decrease in accounts payable during a period
____ 2. Declaration and payment of a cash dividend.
____ 3. Loss on sale of land.
____ 4. Decrease in accounts receivable during a period.
____ 5. Redemption of bonds for cash.
____ 6. Proceeds from sale of equipment at book value.
____ 7. Issuance of common stock for cash.
____ 8. Purchase of a building for cash.
____ 9. Acquisition of land in exchange for common stock.
____ 10. Increase in merchandise inventory during a period.

Accepted Answer

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

Question 14

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

Accepted Answer

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

Question 15

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 16

The income statement of Falcone Company is shown below:  
Additional information:
1. Accounts receivable increased $400,000 during the year.
2. Inventory increased $250,000 during the year.
3. Prepaid expenses increased $200,000 during the year.
4. Accounts payable to merchandise suppliers increased $100,000 during the year.
5. Accrued expenses payable increased $160,000 during the year.
Instructions
Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2010, for Falcone Company, using the direct method.

Accepted Answer

The answer of The income statement of Falcone Company is...

Question 17

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

Accepted Answer

The answer of If accounts receivable increase during a period,...

Question 18

Dolan Company's income statement showed revenues of $230,000 and operating expenses of $150,000. Accounts receivable decreased by $60,000 and accounts payable increased by $40,000 during the year.
Instructions
Compute (a) cash receipts from customers and (b) cash payments for operating expenses using the direct method.

Accepted Answer

The answer of Dolan Company's income statement showed revenues of...

Question 19

Cost of goods sold for the year amounted to $130,000, and during the year, accounts payable ______________ by $8,000 and inventory ______________ by $7,000 resulting in cash paid to suppliers of $115,000.

Accepted Answer

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

Question 20

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

Accepted Answer

The answer of Using the indirect approach, noncash charges in...

Quiz 17: Statement of Cash Flows

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

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

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

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

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

The general ledger of Lopez Company provides the following information: The company's net sales for the year was $2,200,000 and cost of goods sold amounted to $1,500,000. Instructions Compute the following: (a) Cash receipts from customers. (b) Cash payments to suppliers.

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

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

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.

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

Cost of goods sold for the year amounted to $130,000, and during the year, accounts payable by $8,000 and inventory by $7,000 resulting in cash paid to suppliers of $115,000.

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