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Exam 12: Statement of Cash Flows

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Question 51

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A change in cash can be accounted for by changes in

A) liabilities.
B) shareholder's equity.
C) noncash assets.
D) all of the choices are correct.

E) B) and D)
F) B) and C)

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Question 52

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When the direct method is used to determine the net cash flow from operating activities,the following adjustments must be made to income tax expense to determine total income tax payments:

A) add all changes in income taxes and income taxes payable.
B) add decreases in income taxes payable and subtract increases in income taxes payable.
C) add increases in income taxes payable and subtract decreases in income taxes payable.
D) subtract all changes in income taxes payable.

E) B) and C)
F) B) and D)

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Question 53

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Which of the following represent cash inflows from financing activities?

As a general rule,investing cash flows affect

Consider the following information: $\begin{array} { | l | r | } \hline \text { Net income } & \mathbf { 2 0 } , 000 \\\hline \text { Depreciation } & \mathbf { 3 } , 000 \\\hline \text { Increase (decrease) in accounts receivable } & 1,000 \\\hline \text { Increase (decrease) in prepaid rent } & ( 400 ) \\\hline \text { Increase (decrease) in accrued Liabilities } & 900 \\\hline \text { Cash paid to purchase office equipment } & 4,000 \\\hline\end{array}$ The company would report a net cash inflow from operating activities of:

Your company owned equipment with a book value of $120,000 that was sold during this accounting period for $30,500 in cash,and purchased new equipment for $148,000.Your company would record:

Noncash revenues and expenses must be included in net cash flow from operating activities when preparing a Statement of Cash Flows using the direct method.

Fraudulent financial reporting is more likely to result in overstatements of net cash flow from operating activities than as overstatement of net income.

Which of the following would be included in calculating net cash flows from investing activities?

$\begin{array} { | l | r | } \hline \text { Net income } & \$ 7,000 \\\hline \text { Dividends paid to shareholders } & 2,000 \\\hline \text { Cash received from selling land } & \mathbf { 3 , 0 0 0 } \\\hline \text { Cash received from new barik loarn } & 5,000 \\\hline \text { Cash paid for principal on old bark loarn } & 1,000 \\\hline \text { Cash paid to purchase office equipment } & 4,000 \\\hline\end{array}$ -Refer to the above Table.The company would report a net cash inflow (outflow) from investing activities of:

Additional Cash flows from operations leftover after paying for replacement of existing plant,property and equipment and dividends to shareholders are:

Regardless of their use of ASPE or IFRS,all companies are required to report material investing and financing transactions that did not have cash flow effects.

Cash equivalents are assets that are easily converted to cash regardless of their time to maturity.

When a company uses the direct method to determine the net cash flow from operating activities,cash flows from operating activities will:

Cash transactions relating to the purchase and sale of which types of assets affect a company's cash flows from investing activities?

To create consistency across companies:

Cash flows from investing activities include cash:

Under IFRS every company is required to report a statement of cash flows.

Net cash flows provided by operating activities are:

When the indirect method is used,details from which of the following balance sheet accounts are used in calculating both operating and financing cash flows?