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| 1 | |
An increase in the Accounts Receivable account of a company from $20,000 at the beginning of the year to $30,000 at the end of the year would be shown on the company's statement of cash flows prepared under the indirect method as: |
| | A) | an addition to net income of $10,000 in order to arrive at cash flows from operating activities. |
| | B) | an addition to net income of $20,000 in order to arrive at cash flows from operating activities. |
| | C) | a deduction from net income of $10,000 in order to arrive at cash flows from operating activities. |
| | D) | a deduction from net income of $30,000 in order to arrive at cash flows from operating activities. |
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| 2 | |
An increase in the Supplies account of $12,000 over the course of a year would be shown on the company's statement of cash flows prepared under the indirect method as: |
| | A) | an addition of $12,000 under financing activities. |
| | B) | a deduction of $12,000 under financing activities. |
| | C) | an addition to net income of $12,000 in order to arrive at net cash provided by operating activities. |
| | D) | a deduction from net income of $12,000 in order to arrive at net cash provided by operating activities. |
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| 3 | |
An increase in the Salaries Payable account of a company from $2,000 at the beginning of the year, to $6,000 at the end of the year, would be shown on the company's statement of cash flows prepared under the indirect method as: |
| | A) | an addition to net income of $4,000 in order to arrive at cash flows from operating activities. |
| | B) | a cash flow of $4,000 under the investing activities heading. |
| | C) | a cash flow of $4,000 under the financing activities heading. |
| | D) | a deduction from net income of $4,000 in order to arrive at cash flows from operating activities. |
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| 4 | |
Which of the following would be considered a "use" of cash for purposes of constructing a statement of cash flows using the indirect method? |
| | A) | an increase in accounts payable. |
| | B) | an increase in accrued liabilities. |
| | C) | an increase in accumulated depreciation. |
| | D) | an increase in prepaid expenses. |
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| 5 | |
Patel Company recorded the following events for the year just ended:
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073379611/634794/ch15q05_06.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (31.0K)</a>]]>
The net decrease in cash resulting from financing activities for the year was: |
| | A) | $70,000. |
| | B) | $90,000. |
| | C) | $190,000. |
| | D) | $280,000. |
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| 6 | |
Patel Company recorded the following events for the year just ended:
<![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073379611/634794/ch15q05_06.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (31.0K)</a>]]>
The net change in cash resulting from investing activities for the year was: |
| | A) | ($5,000). |
| | B) | $10,000. |
| | C) | $40,000. |
| | D) | $260,000. |
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| 7 | |
Eli Company recorded the following activity for the year just ended:
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073379611/634794/ch15q07_08.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (34.0K)</a>]]>
The net cash provided by investing activities for the year was: |
| | A) | $560,000. |
| | B) | $760,000. |
| | C) | $800,000. |
| | D) | $820,000. |
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| 8 | |
Eli Company recorded the following activity for the year just ended:
<![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073379611/634794/ch15q07_08.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (34.0K)</a>]]>
The net cash provided by financing activities for the year was: |
| | A) | $400,000. |
| | B) | $520,000. |
| | C) | $560,000. |
| | D) | $600,000. |
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| 9 | |
The sale of equipment at a gain would be shown on the statement of cash flows prepared under the indirect method in which of the following manners? The cash received would be shown: |
| | A) | As an adjustment to net income and the gain would not appear on the statement of cash flows. |
| | B) | Under Investing Activities and the gain would not appear on the statement of cash flows. |
| | C) | Under Investing Activities and the gain would be added to net income. |
| | D) | Under Investing Activities and the gain would be deducted from net income. |
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| 10 | |
When using the indirect method to prepare the statement of cash flows, depletion expense should be presented as a(n): |
| | A) | investing and financing activity not affecting cash. |
| | B) | addition to net income. |
| | C) | deduction from net income. |
| | D) | cash flow from financing activities. |
| | E) | cash flow from investing activities. |
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