Question:* In 2007, XYZ Company had a net loss of $160,000 and reported the following:
Dividends paid: $40,000
Depreciation expense: $30,000
Increase in accounts payable: $15,000
Issuance of stock: $100,000
Retirement of debt: $50,000
Given this data, the amount of cash flow from operations was ______________.
Answer: • ($115,000)
Question:* Equity in the undistributed earnings of a recognized affiliate would appear in which of the following sections of the cash flow statement?
Answer: • Financing section
Question:* Dividends paid for the year would appear in which of the following sections of the cash flow statement?
Answer: • Financing section
Question:* Equity income from an affiliate would be shown _____________________.
Answer: • as a deduction from net income in the operations section
Question:* Issuing ten-year bonds will cause cash to ______________ .
Answer: • increase
Question:* A cash flow statement is typically prepared _____________________.
Answer: • after both the balance sheet and the income statement are prepared
Question:* Which of the following would be shown in the investing section of a cash flow statement?
Answer: • None of the above
Question:* The sale of equipment for cash with a recognized loss would appear in which of the following sections of the cash flow statement?
Answer: • Operating section
Question:* An increase in the accounts payable balance would appear in which of the following sections of the cash flow statement?
Answer: • Operating section
Question:* Pre-paying a one-year insurance policy will cause cash to ______________ .
Answer: • decrease
Question:* Warranties payable that increased during the year would appear in which of the following sections of the cash flow statement?
Answer: • It would not appear on the statement.
Question:* The acquisition of a building and/or land by entering into a lease that meets the capital lease criteria would appear in which of the following sections of the cash flow statement?
Answer: • Investing section
Question:* Depreciation recorded on equipment would appear in which of the following sections of the cash flow statement?
Answer: • Operating section
Question:* Which of the following would be shown in the investing section of a cash flow statement?
Answer: • Acquisition of equipment through a capital lease
Question:* Cash borrowed from a bank by issuing a short-term note payable would appear in which of the following sections of the cash flow statement?
Answer: • Financing section
Question:* Collecting receivables will cause cash to ______________ .
Answer: • increase
Question:* In 2007, XYZ Company had a net income of $150,000 and reported the following:
Depreciation expense: $21,000
Issuance of debt: $120,000
Loss on sale of equipment: $23,000
Purchase of building: $110,000
Increase in inventory: $12,000
Given this data, the amount of cash flow from operations was ______________.
Answer: • $182,000
Question:* Preferred stock issued for cash would appear in which of the following sections of the cash flow statement?
Answer: • Financing section
Question:* The most popular method of presenting cash from operations in a cash flow statement is the _________________.
Answer: • indirect method
Question:* The amortization of a recorded patent would appear in which of the following sections of the cash flow statement?
Answer: • Operating section
Question:* Preferred stock converted into common stock would appear in which of the following sections of the cash flow statement?
Answer: • Financing section
Question:* An amortization of a bond discount would be shown __________________.
Answer: • as an add-back to net income when determining cash flow from operations
Question:* When determining cash flow from operations, which of the following would NOT be deducted from net income?
Answer: • Loss on sale of equipment
Question:* Which of the following statements about depreciation expense is true?
Answer: • All of the above statements are true.
Question:* Which of the following transactions would be shown on a cash flow statement, but does not affect cash?
Answer: • Exchange of land for stock
Question:* When determining cash flow from operations, which of the following would NOT be deducted from net income?
Answer: • Gain on sale of marketable securities
Question:* An investment in the stock of another company would appear in which of the following sections of the cash flow statement?
Answer: • Investing section
Question:* Which of the following typically happens during the maturation phase of a product's life cycle?
Answer: • Cash outflow exceeds cash inflow from investing activities.
Question:* Paying previously declared dividends will cause cash to ______________ .
Answer: • decrease
Question:* Treasury stock purchased for cash would appear in which of the following sections of the cash flow statement?
Answer: • Financing section
Question:* The use of a bond sinking fund to retire a long-term debt at maturity would appear in which of the following sections of the cash flow statement?
Answer: • Financing section
Question:* When determining cash flow from operations, which of the following would be added back to net income?
Answer: • All of the above
Question:* XYZ reported balances in the Accumulated Depreciation account of $130,000 on 01/01/07 and $120,000 on 12/31/07. During 2007, an asset costing $100,000 (with an accumulated depreciation of $80,000) was sold for $20,000.
Given this data, the depreciation expense for 2007 was _____________.
Answer: • $90,000
Question:* A payment made from accounts payable will cause cash to ______________ .
Answer: • decrease
Question:* Cash paid for land would be shown as ________________.
Answer: • cash flow from investing
Question:* Declaring dividends will cause cash to ______________ .
Answer: • show no change
Question:* Amortized discount on bonds payable would appear in which of the following sections of the cash flow statement?
Answer: • Operating section
Question:* In 2007, XYZ Company had a net income of $100,000 and reported the following account changes on its balance sheet:
Accounts Receivable: $6,000 increase
Accounts Payable: $2,000 increase
Building: $8,000 decrease
Accumulated Depreciation: $3,000 increase
Bonds Payable: $16,000 increase
Given this data, the amount of cash flow from operations was ______________.
Answer: • $99,000
Question:* At the beginning and end of 2007, XYZ Company reported the following balances for Bonds Payable:
Jan 1: $100,000
Dec 31: $140,000
In addition, $60,000 In bonds was retired In 2007.
Given the above data, the amount of Bonds Payable issued during the year was ______________.
Answer: • $100,000
Question:* Deferred income tax payable that increased during the year would appear in which of the following sections of the cash flow statement?
Answer: • Operating section
Question:* Recording a depreciation expense will cause cash to ______________ .
Answer: • decrease
Question:* A cash payment for land acquisition would appear in which of the following sections of the cash flow statement?
Answer: • Investing section
Question:* Which of the following typically happens during the growth phase of a product's life cycle?
Answer: • Cash outflow exceeds cash inflow from investing activities.
Question:* When determining cash flow from operations, which of the following would be a deduction from net income?
Answer: • Increased accounts receivable
Question:* Which of the following would be shown in the financing section of a cash flow statement?
Answer: • Long-term bonds payable issued
Question:* Salaries paid during the year would appear in which of the following sections of the cash flow statement?
Answer: • Operating section
Question:* Long-term investments sold for cash with a recognized gain would appear in which of the following sections of the cash flow statement?
Answer: • Operating section
Question:* Which of the following would be included in the investing section of a cash flow statement?
Answer: • All of the above would be included in the investing section.
Question:* In most countries, the preparation of a __________________ is a common practice.
Answer: • cash flow statement
Question:* On their income statement, XYZ Company reported $600,000 in sales, $320,000 in depreciation expense, $60,000 in income taxes, and $100,000 in other expenses. In addition, $80,000 of common stock was issued for cash during the year. Assuming that the company's non-cash working capital balances did not change during the year, the total amount of cash from operations was ____________.
Answer: • $440,000
Question:* Accounts receivable that increased during the year would appear in which of the following sections of the cash flow statement?
Answer: • Operating section
Question:* Unearned revenue that had been reduced during the year would appear in which of the following sections of the cash flow statement?
Answer: • Operating section
Question:* In determining cash flow from operations, which of the following would be an add-back to net income?
Answer: • Loss on sale of building
Question:* Accruing an income tax liability will cause cash to ______________ .
Answer: • show no change
Question:* Prepaid rent that increased during the year would appear in which of the following sections of the cash flow statement?
Answer: • Operating section
Question:* Cash received from sale of investment would be shown on a cash flow statement as ___________.
Answer: • cash flow from investing
Question:* During 2007, XYZ Company experienced the following changes:
Current liabilities: $75,000 increase
Non-current liabilities: $45,000 decrease
Owners' equity: $51,000 decrease
Non-current assets: $42,000 increase
Current assets (other than Cash): $18,000 increase
Given the above data, the change in cash for 2007 was ____________.
Answer: • ($81,000)
Question:* The acquisition of a patent would be shown __________________.
Answer: • in the investing section
Question:* Land acquired by issuing preferred stock would appear in which of the following sections of the cash flow statement?
Answer: • It would not appear on the statement.
Question:* When determining cash flow from operations, which of the following would NOT be added back to net income?
Answer: • Amortization of bond premium
Question:* Which of the following is NOT a characteristic of growing firms?
Answer: • All of the above
Question:* Which of the following typically happens during the introduction phase of a product's life cycle?
Answer: • Cash outflow exceeds cash inflow from investing activities.
Question:* On a cash flow statement, depreciation expense ________________.
Answer: • should be added to net income when determining cash provided by operations
Question:* The major components of a cash flow statement are ________________________.
Answer: • cash flow from operations, cash flow from investing, and cash flow from financing
Question:* Which of the following statements does NOT illustrate a proper interpretation of information in a cash flow statement?
Answer: • All of the above
Question:* Paying cash to retire preferred stock will cause cash to ______________ .
Answer: • decrease
Question:* When preparing cash flow statements, the practice of presenting cash from operations by listing all cash-generating revenues followed by all cash expenses is called the ______________.
Answer: • direct method
Question:* In determining cash flow from operations, which of the following would be added to net income?
Answer: • Increased accounts payable
Question:* In 2007, XYZ Company had a net loss of $160,000 and reported the following:
Dividends paid: $40,000
Depreciation expense: $30,000
Increase in accounts payable: $15,000
Issuance of stock: $100,000
Retirement of debt: $50,000
Given this data, the net change in cash for 2007 was ______________.
Answer: • ($105,000)
Question:* Which of the following would NOT be shown in the investing section of a cash flow statement?
Answer: • All of the above are shown in the investing section of a cash flow statement
Question:* Treasury stock sold for an amount greater than its repurchase price would appear in which of the following sections of the cash flow statement?
Answer: • Financing section
Question:* Which of the following transactions would be shown as a cash flow from financing?
Answer: • Cash paid for dividends
Question:* Acquisition of treasury stock would be shown _____________________.
Answer: • in the financing section
Question:* Which of the following statements expresses the objective of a cash flow statement?
Answer: • All of the above
Question:* New equipment purchased by issuing a long-term note payable would appear in which of the following sections of the cash flow statement?
Answer: • Investing section
Question:* Purchasing inventory with a check will cause cash to ______________ .
Question:* XYZ Company reported the following information on its balance sheet:
01/01/07 Building: $800,000 Accumulated Depreciation: $200,000
12/31/07 Building: $785,000 Accumulated Depreciation: $225,000
In 2007, the company also purchased a building at a cost of $100,000.
Considering the above data, did the company sell any building during the year, and if so, what was its original cost?
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