Question 1

In arriving at cash from operating activities, adding a decrease in Supplies to net income eliminates the effect of recording adjusts net income for transactions that:

Accepted Answer

A)   increased net income, but has not been paid in cash this period.
B)   decreased net income, but has not been paid in cash this period.
C)   decreased net income and decreased cash.
D)   flow this period increased net income and increased cash flow this perioD.Adding decreases in current assets eliminates the effects of some transactions that decreased net income but did not affect cash in the current perioD.For example, when Supplies are used, net income decreases but cash is not affecteD.To eliminate these noncash effects from our cash flow computations, we must add back decreases in Supplies and other current assets.E) A) and B)
F) All of the above

Question 2

If a company's Sales Revenue was $171,356 and cash collected from customers was $167,803, which of the following would be consistent with this difference?

Accepted Answer

A)   Accounts Receivable could have decreased.
B)   Cash payments could have been larger than the related expense accounts.
C)   Accounts Receivable could have increased.
D)   Cash payments could have been smaller than the related expense accounts.E) A) and B)
F) B) and C)

Question 3

If Sales are $850,000 and the beginning and ending balances of Accounts Receivable are $43,000 and $48,000, respectively, the cash collected from customers is:

Accepted Answer

A)   $850,000.
B)   $802,000.
C)   $845,000.
D)   $855,000.E) None of the above
F) A) and B)

Question 4

The payment of salaries and wages would be reported as an operating activity on the statement of cash flows

Accepted Answer

A) True 
 B)False

Question 5

St. Pierre Enterprises reported the following information in its financial statements:  What is the amount of cash collected from customers during the current year?

Accepted Answer

A)   $350,000
B)   $380,500
C)   $340,000
D)   $410,000E) A) and B)
F) B) and D)

Question 6

When the indirect method is used to determine net cash provided by (used in)  operating activities, subtracting an increase in Accounts Receivable from net income eliminates the effect of recording revenue that:

Accepted Answer

A)   increased net income, but did not impact cash.
B)   decreased net income, but did not impact cash.
C)   increased net income and increased cash flow.
D)   decreased net income and decreased cash flow.E) A) and C)
F) A) and B)

Question 7

Assume that a company chooses the indirect method to determine net cash flows from operating activities.
Required:
Part a. Explain why net income is the starting point when the indirect method is used to determine cash flows from operating activities.
Part b. Briefly explain why a company's net income is most likely different in amount than its cash flows from operating activities.

Accepted Answer

Part a.
The cash flows from operating ac...

Question 8

Cash provided by issuing stock to owners should be reported as cash:

Accepted Answer

A)   inflows from financing activities.
B)   outflows from financing activities.
C)   inflows from investing activities.
D)   outflows from investing activities.E) C) and D)
F) B) and D)

Exam 12: Statement of Cash Flows

Correct Answer
verified
Part a.
The cash flows from operating ac...
View Answer

If a company's Sales Revenue was $171,356 and cash collected from customers was $167,803, which of the following would be consistent with this difference?

Correct Answer
verified

The payment of salaries and wages would be reported as an operating activity on the statement of cash flows

Correct Answer
verified

In arriving at cash from operating activities, adding a decrease in Supplies to net income eliminates the effect of recording adjusts net income for transactions that:

Correct Answer
verified

Cash provided by issuing stock to owners should be reported as cash:

Correct Answer
verified

St. Pierre Enterprises reported the following information in its financial statements: What is the amount of cash collected from customers during the current year?

Correct Answer
verified

If Sales are $850,000 and the beginning and ending balances of Accounts Receivable are $43,000 and $48,000, respectively, the cash collected from customers is:

Correct Answer
verified

When the indirect method is used to determine net cash provided by (used in) operating activities, subtracting an increase in Accounts Receivable from net income eliminates the effect of recording revenue that:

Correct Answer
verified

Exam 12: Statement of Cash Flows

Correct AnswerverifiedPart a.The cash flows from operating ac...View AnswerShow Answer

If a company's Sales Revenue was $171,356 and cash collected from customers was $167,803, which of the following would be consistent with this difference?

Correct AnswerverifiedShow Answer

The payment of salaries and wages would be reported as an operating activity on the statement of cash flows

Correct AnswerverifiedShow Answer

In arriving at cash from operating activities, adding a decrease in Supplies to net income eliminates the effect of recording adjusts net income for transactions that:

Correct AnswerverifiedShow Answer

Cash provided by issuing stock to owners should be reported as cash:

Correct AnswerverifiedShow Answer

St. Pierre Enterprises reported the following information in its financial statements: What is the amount of cash collected from customers during the current year?

Correct AnswerverifiedShow Answer

If Sales are $850,000 and the beginning and ending balances of Accounts Receivable are $43,000 and $48,000, respectively, the cash collected from customers is:

Correct AnswerverifiedShow Answer

When the indirect method is used to determine net cash provided by (used in) operating activities, subtracting an increase in Accounts Receivable from net income eliminates the effect of recording revenue that:

Correct AnswerverifiedShow Answer

Correct Answer
verified
Part a.
The cash flows from operating ac...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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