Thursday, December 17, 2015

Accounting Skills Test (Cash Flow) test answers of 2016.

Find Complete and recently updated Correct Question and answers of Accounting Skills Test (Cash Flow). All Answers updated regularly with new questions. Upwork Accounting Skills Test (Cash Flow) test answers of 2016.



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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