Question 1

Cash receipts from customers are greater than sales revenues when there is a(n)
A)increase in accounts receivable.
B)decrease in accounts receivable.
C)increase in cost of goods sold.
D)decrease in cost of goods sold.

Accepted Answer

Cash receipts from customers are greater than sales revenues when there is a decrease in accounts receivable. This indicates that customers are paying off their previous balances, leading to more cash being received than the current period's sales revenue.

Question 2

Land costing $65,000 was sold for $125,000 cash. The gain on the sale was reported on the income statement as an operating expense. On the statement of cash flows, what amount should be reported as an investing activity from the sale of the land?
A)$5,000
B)$60,000
C)$65,000
D)$125,000

Accepted Answer

The answer of Land costing $65,000 was sold for $125,000...

Question 3

During the year, Marigold Corp reported an increase in Merchandise Inventory of $25,000. Cost of goods sold for the year was $150,000, and there was an $8,000 decrease in Accounts Payable. What were the cash payments to suppliers during the year?
A)$117,000
B)$133,000
C)$167,000
D)$183,000

Accepted Answer

The cash payments to suppliers can be calculated as: Cost of Goods Sold ($150,000) + Increase in Inventory ($25,000) - Decrease in Accounts Payable ($8,000) = $183,000.

Question 4

On the statement of cash flows, the operating activities section prepared using the direct method would include
A)receipts from the issue of common shares.
B)receipts from the sale of investments.
C)payments for the acquisition of investments.
D)cash receipts from sales activities.

Accepted Answer

The operating activities section prepared using the direct method includes cash receipts and payments directly related to the principal revenue-generating activities of the business. This would include cash receipts from sales activities, such as customer payments for goods or services sold. Receipts from the issue of common shares and receipts from the sale of investments would be classified as financing activities or investing activities, respectively. Payments for the acquisition of investments would be classified as investing activities.

Question 5

Which of the following items does not appear in the operating activities section of the statement of cash flows prepared under the direct method?
A)Cash payments to suppliers
B)Cash collections from customers
C)Depreciation expense
D)Cash payments for interest

Accepted Answer

Depreciation expense does not appear in the operating activities section of the statement of cash flows prepared under the direct method because it is a non-cash item. The direct method only includes cash transactions in the operating activities section, such as cash payments to suppliers and cash collections from customers. Cash payments for interest are also included in the operating activities section under the direct method.

Question 6

If a loss of $20,000 is incurred in selling (for cash) office equipment that cost $90,000 and had accumulated depreciation of $22,500, then the actual cash proceeds must have been
A)$47,500.
B)$67,500.
C)$70,000.
D)$87,500.

Accepted Answer

The answer of If a loss of $20,000 is incurred...

Question 7

Use the following information for questions 
Harlowe Corp, a private company reporting under ASPE, engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows.
-Purchase of land and building with a mortgage:
A)Operating activities section
B)Investing activities section
C)Financing activities section
D)Does not represent a cash flow

Accepted Answer

The purchase of land and building with a mortgage does not involve an immediate cash outflow, as it is financed through a mortgage. Therefore, it does not represent a cash flow in the statement of cash flows.

Question 8

Use the following information for questions 
Harlowe Corp, a private company reporting under ASPE, engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows.
-Issue of common shares in exchange for equipment:
A)Operating activities section
B)Investing activities section
C)Financing activities section
D)Does not represent a cash flow

Accepted Answer

The issue of common shares in exchange for equipment does not involve cash and therefore does not appear on the statement of cash flows.

Question 9

Hickory Inc. reports the following: End of Year Beginning of Year
Merchandise Inventory $26,000 $42,000
Accounts Payable 33,000 18,000
If cost of goods sold for the year is $137,000, the amount of cash paid to suppliers is
A)$168,000.
B)$138,000.
C)$136,000.
D)$106,000.

Accepted Answer

The answer of Hickory Inc. reports the following: End of...

Question 10

During the year, Beech Corp reported Income Tax Expense of $49,000. There was a $6,000 decrease in federal income tax payable and a $4,000 increase in provincial income tax payable during the year. What were Beech's cash payments for income tax for the year?
A)$59,000
B)$51,000
C)$47,000
D)$39,000

Accepted Answer

The cash payments for income tax can be calculated by adding the increase in federal income tax payable ($6,000) to the increase in provincial income tax payable ($4,000) and subtracting this amount from the total income tax expense of $49,000. 
Cash payments for income tax = $49,000 - ($6,000 + $4,000) = $39,000. Therefore, the correct answer is option B.

Question 11

When equipment is sold for cash, the amount received is reflected as a cash
A)inflow in the operating activities section.
B)inflow in the financing activities section.
C)inflow in the investing activities section.
D)outflow in the operating activities section.

Accepted Answer

When equipment (which is a non-current asset) is sold for cash, the amount received is reflected as an inflow in the investing activities section of the statement of cash flows. This is because selling or disposing of a non-current asset is considered an investing activity, and cash received from these activities is categorized as investing cash inflows.

Question 12

During the year, Salaries Payable decreased by $9,000. If Salary Expense was $155,000 for the year, the cash paid to employees was
A)$173,000.
B)$164,000.
C)$155,000.
D)$146,000.

Accepted Answer

The decrease in Salaries Payable means that cash was paid out to employees. Therefore, the cash paid to employees for the year is calculated as follows: 
Cash Paid to Employees = Salary Expense - Decrease in Salaries Payable 
= $155,000 - $9,000 = $146,000 
Therefore, the correct answer is B.

Question 13

The following information relates to Jatema Corporation:  What was the amount of cash paid for insurance during 2013?
A)$625,000
B)$500,000
C)$480,000
D)$460,000

Accepted Answer

The answer of The following information relates to Jatema Corporation:...

Question 14

During the year, Beta Corp reported $420,000 in cash sales and $2,800,000 in credit sales. Beginning Accounts Receivable was $470,000 and ending Accounts Receivable was $540,000. What was the total cash collected from all customers during the year?
A)$2,680,000
B)$2,870,000
C)$2,730,000
D)$3,150,000

Accepted Answer

The answer of During the year, Beta Corp reported $420,000...

Question 15

During the year, Oak Inc. reported other operating expenses of $85,000. The Prepaid Expenses decreased $7,000 during the year, and Accrued Liabilities increased by $13,000. What were Oak's cash payments for operating expenses for the year?
A)$105,000
B)$ 91,000
C)$ 79,000
D)$ 65,000

Accepted Answer

The answer of During the year, Oak Inc. reported other...

Question 16

If a company has both an inflow and outflow of cash related to the acquisition of equipment for $15,000 cash and the sale of machinery for $10,000 cash, the
A)two cash effects can be netted and presented as one item in investing activities.
B)cash inflow from the sale and cash outflow for the acquisition should be reported separately in investing activities.
C)two cash effects can be netted and presented as one item in financing activities.
D)cash inflow and cash outflow should be reported separately in financing activities.

Accepted Answer

Cash inflow from the sale and cash outflow for the acquisition should be reported separately in investing activities as they are both related to the company's investment activities. Netting them would not provide sufficient information about the nature and amount of these transactions.

Question 17

Which of the following would not appear in the operating activities section of a statement of cash flows prepared using the direct method?
A)Cash receipts from customers
B)Cash paid for income taxes
C)Gain on sale of equipment
D)Cash paid to employees

Accepted Answer

The gain on sale of equipment would be included in the investing activities section since it relates to a sale of a long-term asset. The other options would all be included in the operating activities section.

Question 18

In which section would the purchase of land for cash be classified on the statement of cash flows?
A)Operating activities section
B)Investing activities section
C)Financing activities section
D)Does not represent a cash flow

Accepted Answer

The purchase of land for cash is a type of investing activity and would be included in the investing activities section of the statement of cash flows.

Question 19

If a gain of $30,000 is incurred in selling (for cash) office equipment that cost $120,000 and had accumulated depreciation of $40,000, the total amount reported in investing activities is
A)$90,000
B)$110,000
C)$130,000
D)$150,000

Accepted Answer

The amount reported in investing activities for the sale of office equipment is calculated as follows:
Sales price of equipment (cash received) = $120,000 - $40,000 + $30,000 = $110,000
Therefore, the total amount reported in investing activities is $110,000.

Question 20

During the year, Alfa Limited reported credit sales of $850,000. Beginning Accounts Receivable was $60,000 and ending Accounts Receivable was $140,000. What were the cash collections from customers during the year?
A)$930,000
B)$850,000
C)$770,000
D)$710,000

Accepted Answer

Cash collections from customers during the year can be calculated as:
Beginning Accounts Receivable + Credit Sales - Ending Accounts Receivable = Cash Collections
Therefore, cash collections from customers during the year = $60,000 + $850,000 - $140,000 = $770,000. Option C is the correct answer.

Quiz 13: Statement of Cash Flows

Cash receipts from customers are greater than sales revenues when there is a(n)

Land costing $65,000 was sold for $125,000 cash. The gain on the sale was reported on the income statement as an operating expense. On the statement of cash flows, what amount should be reported as an investing activity from the sale of the land?

During the year, Marigold Corp reported an increase in Merchandise Inventory of $25,000. Cost of goods sold for the year was $150,000, and there was an $8,000 decrease in Accounts Payable. What were the cash payments to suppliers during the year?

On the statement of cash flows, the operating activities section prepared using the direct method would include

Which of the following items does not appear in the operating activities section of the statement of cash flows prepared under the direct method?

If a loss of $20,000 is incurred in selling (for cash) office equipment that cost $90,000 and had accumulated depreciation of $22,500, then the actual cash proceeds must have been

Use the following information for questions Harlowe Corp, a private company reporting under ASPE, engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows. -Purchase of land and building with a mortgage:

Use the following information for questions Harlowe Corp, a private company reporting under ASPE, engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows. -Issue of common shares in exchange for equipment:

Hickory Inc. reports the following: End of Year Beginning of Year Merchandise Inventory $26,000 $42,000 Accounts Payable 33,000 18,000 If cost of goods sold for the year is $137,000, the amount of cash paid to suppliers is

During the year, Beech Corp reported Income Tax Expense of $49,000. There was a $6,000 decrease in federal income tax payable and a $4,000 increase in provincial income tax payable during the year. What were Beech's cash payments for income tax for the year?

When equipment is sold for cash, the amount received is reflected as a cash

During the year, Salaries Payable decreased by $9,000. If Salary Expense was $155,000 for the year, the cash paid to employees was

The following information relates to Jatema Corporation: What was the amount of cash paid for insurance during 2013?

During the year, Beta Corp reported $420,000 in cash sales and $2,800,000 in credit sales. Beginning Accounts Receivable was $470,000 and ending Accounts Receivable was $540,000. What was the total cash collected from all customers during the year?

During the year, Oak Inc. reported other operating expenses of $85,000. The Prepaid Expenses decreased $7,000 during the year, and Accrued Liabilities increased by $13,000. What were Oak's cash payments for operating expenses for the year?

If a company has both an inflow and outflow of cash related to the acquisition of equipment for $15,000 cash and the sale of machinery for $10,000 cash, the

Which of the following would not appear in the operating activities section of a statement of cash flows prepared using the direct method?

In which section would the purchase of land for cash be classified on the statement of cash flows?

If a gain of $30,000 is incurred in selling (for cash) office equipment that cost $120,000 and had accumulated depreciation of $40,000, the total amount reported in investing activities is

During the year, Alfa Limited reported credit sales of $850,000. Beginning Accounts Receivable was $60,000 and ending Accounts Receivable was $140,000. What were the cash collections from customers during the year?