Question 1

Last year Burch Corporation's cash account decreased by $6,000. Net cash provided by investing activities was $13,000. Net cash used in financing activities was $30,000. On the statement of cash flows, the net cash flow provided by (used in) operating activities was:
A)$(23,000)
B)$(17,000)
C)$(6,000)
D)$11,000

Accepted Answer

The answer of Last year Burch Corporation's cash account decreased...

Question 2

An increase in accrued liabilities of $1,000 during a 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 $1,000 in order to arrive at net cash provided by operating activities.
B)a deduction from net income of $1,000 in order to arrive at net cash provided by operating activities.
C)a deduction of $1,000 under investing activities.
D)an addition of $1,000 under financing activities.

Accepted Answer

An increase in accrued liabilities indicates that the company has incurred expenses that have not yet been paid in cash, effectively increasing cash flow. Under the indirect method on the statement of cash flows, this increase is added back to net income to calculate net cash provided by operating activities, as it represents a non-cash expense.

Question 3

Tani Corporation's most recent balance sheet appears below:  The company's net income for the year was $18 and it did not sell or retire any property, plant, and equipment during the year. Cash dividends were $4. The net cash provided by (used in) investing activities for the year was:
A)($45)
B)$45
C)($3)
D)$3

Accepted Answer

The answer of Tani Corporation's most recent balance sheet appears...

Question 4

Excerpts from Deblois Corporation's comparative balance sheet appear below:  Which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method?
A)The change in Accounts Payable is added to net income; The change in Accrued Liabilities is subtracted from net income
B)The change in Accounts Payable is added to net income; The change in Accrued Liabilities is added to net income
C)The change in Accounts Payable is subtracted from net income; The change in Accrued Liabilities is added to net income
D)The change in Accounts Payable is subtracted from net income; The change in Accrued Liabilities is subtracted from net income

Accepted Answer

The answer of Excerpts from Deblois Corporation's comparative balance sheet...

Question 5

The following transactions occurred last year at Jolly Corporation:  Based solely on the above information, the net cash provided by financing activities for the year on the statement of cash flows would be:
A)$179,000
B)$59,000
C)$(109,000)
D)$46,000

Accepted Answer

The answer of The following transactions occurred last year at...

Question 6

Sonier Corporation's most recent balance sheet appears below:  The net income for the year was $97. Cash dividends were $19. The company did not issue any bonds or repurchase any of its common stock during the year. The net cash provided by (used in) financing activities for the year was:
A)($43)
B)($19)
C)($25)
D)$1

Accepted Answer

The answer of Sonier Corporation's most recent balance sheet appears...

Question 7

Excerpts from Aultman Corporation's comparative balance sheet appear below:  Which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method?
A)The change in Inventory is added to net income; The change in Accounts Payable is added to net income
B)The change in Inventory is added to net income; The change in Accounts Payable is subtracted from net income
C)The change in Inventory is subtracted from net income; The change in Accounts Payable is added to net income
D)The change in Inventory is subtracted from net income; The change in Accounts Payable is subtracted from net income

Accepted Answer

The answer of Excerpts from Aultman Corporation's comparative balance sheet...

Question 8

Kaze Corporation's cash and cash equivalents consist of cash and marketable securities. Last year the company's cash account increased by $25,000 and its marketable securities account decreased by $15,000. Cash provided by operating activities was $38,000. Net cash provided by investing activities was $9,000. Based on this information, the net cash flow from financing activities on the statement of cash flows was:
A)a net $37,000 decrease.
B)a net $37,000 increase.
C)a net $47,000 decrease.
D)a net $47,000 increase.

Accepted Answer

To find the net cash flow from financing activities, we need to use the formula: Net cash flow from financing activities = Change in cash + Change in marketable securities - Net cash provided by operating activities - Net cash provided by investing activities. 
Using the information given, we have: 
Change in cash = $25,000 (increase) 
Change in marketable securities = -$15,000 (decrease) 
Net cash provided by operating activities = $38,000 
Net cash provided by investing activities = $9,000 
Plugging these numbers into the formula, we get: 
Net cash flow from financing activities = $25,000 - $15,000 - $38,000 - $9,000 = -$37,000 
This means that there was a net $37,000 decrease in cash flow from financing activities. Therefore, the answer is A.

Question 9

Kaeser Corporation's most recent balance sheet appears below:  The company's net income for the year was $52 and it did not sell or retire any property, plant, and equipment during the year. Cash dividends were $9. The net cash provided by (used in) investing activities for the year was:
A)$17
B)$67
C)($17)
D)($67)

Accepted Answer

The answer of Kaeser Corporation's most recent balance sheet appears...

Question 10

An increase in accounts receivable of $1,000 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 to net income of $1,000 in order to arrive at net cash provided by operating activities.
B)a deduction from net income of $1,000 in order to arrive at net cash provided by operating activities.
C)an addition of $1,000 under financing activities.
D)a deduction of $1,000 under financing activities.

Accepted Answer

An increase in accounts receivable signifies that the company has not received the cash payment for goods or services provided, which means that the revenue has been earned but not yet collected. Therefore, it should be deducted from net income in the operating activities section of the statement of cash flows under the indirect method as it is a non-cash expense.

Question 11

When computing the net cash provided by operating activities using the indirect approach on the statement of cash flows, which item below would NOT be added to net income?
A)Depreciation.
B)Loss on the sale of an asset.
C)Decrease in accounts payable.
D)Decrease in prepaid expenses.

Accepted Answer

Decrease in accounts payable is a source of cash, so it would be subtracted from net income when computing the net cash provided by operating activities using the indirect approach on the statement of cash flows.

Question 12

Adah Corporation prepares its statement of cash flows using the indirect method. Which of the following would be subtracted from net income in the operating activities section of the statement? 
A)Option A
B)Option B
C)Option C
D)Option D

Accepted Answer

The answer of Adah Corporation prepares its statement of cash...

Question 13

An increase in the Inventory account of a company from $10,000 at the beginning of the year to $15,000 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 $5,000 in order to arrive at net cash provided by operating activities.
B)a deduction from net income of $5,000 in order to arrive at net cash provided by operating activities.
C)an addition to net income of $15,000 in order to arrive at net cash provided by operating activities.
D)a deduction from net income of $10,000 in order to arrive at net cash provided by operating activities.

Accepted Answer

An increase in inventory means that the company spent cash to purchase additional inventory during the year. Under the indirect method, changes in current asset accounts (such as inventory) are adjusted as a deduction from net income in order to arrive at net cash provided by operating activities. Therefore, an increase in inventory of $5,000 would be deducted from net income in order to arrive at net cash provided by operating activities.

Question 14

The following events occurred last year at Dorder Corporation:  Based on the above information, the cash provided (used) by investing activities for the year on the statement of cash flows would net to:
A)$(21,000)
B)$(12,000)
C)$(32,000)
D)$(69,000)

Accepted Answer

The answer of The following events occurred last year at...

Question 15

The Warrel Corporation reported the following data for last year:  Based solely on this information, the net cash provided (used) by financing activities on the statement of cash flows would be:
A)$12,000
B)$34,000
C)$(12,000)
D)$(18,000)

Accepted Answer

The answer of The Warrel Corporation reported the following data...

Question 16

Partin Corporation's cash and cash equivalents consist of cash and marketable securities. Last year the company's cash account increased by $31,000 and its marketable securities account decreased by $22,000. Cash provided by operating activities was $108,000. Net cash used in financing activities was $70,000. Based on this information, the net cash flow from investing activities on the statement of cash flows was:
A)a net $9,000 increase.
B)a net $29,000 decrease.
C)a net $38,000 increase.
D)a net $38,000 decrease.

Accepted Answer

The answer of Partin Corporation's cash and cash equivalents consist...

Question 17

Excerpts from Neuwirth Corporation's comparative balance sheet appear below:  Which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method?
A)The change in Accounts Receivable is added to net income; The change in Inventory is added to net income
B)The change in Accounts Receivable is added to net income; The change in Inventory is subtracted from net income
C)The change in Accounts Receivable is subtracted from net income; The change in Inventory is subtracted from net income
D)The change in Accounts Receivable is subtracted from net income; The change in Inventory is added to net income

Accepted Answer

The answer of Excerpts from Neuwirth Corporation's comparative balance sheet...

Question 18

Marbry Corporation's balance sheet and income statement appear below:   Cash dividends were $21. The company did not issue any bonds or repurchase any of its own common stock during the year. The net cash provided by (used in) financing activities for the year was:
A)$4
B)($22)
C)($5)
D)($21)

Accepted Answer

The answer of Marbry Corporation's balance sheet and income statement...

Question 19

Klicker Corporation's most recent balance sheet appears below:  The company's net income for the year was $152 and it did not issue any bonds or repurchase any of its common stock during the year. Cash dividends were $40. The net cash provided by (used in) financing activities for the year was:
A)($49)
B)($40)
C)$4
D)($13)

Accepted Answer

The answer of Klicker Corporation's most recent balance sheet appears...

Question 20

Which of the following would be added to net income in the operating activities section of a statement of cash flows prepared using the indirect method?
A)a decrease in accounts receivable.
B)an increase in prepaid expenses.
C)an increase in accrued liabilities.
D)an increase in property, plant and equipment.

Accepted Answer

A decrease in accounts receivable would result in an increase in cash flow from operating activities because it means that the company has collected more cash from customers than it earned in revenue during the period. Prepaid expenses, accrued liabilities, and property, plant, and equipment are not directly related to cash flow from operating activities.

Quiz 13: Statement of Cash Flows

Last year Burch Corporation's cash account decreased by $6,000. Net cash provided by investing activities was $13,000. Net cash used in financing activities was $30,000. On the statement of cash flows, the net cash flow provided by (used in) operating activities was:

An increase in accrued liabilities of $1,000 during a year would be shown on the company's statement of cash flows prepared under the indirect method as:

Tani Corporation's most recent balance sheet appears below: The company's net income for the year was $18 and it did not sell or retire any property, plant, and equipment during the year. Cash dividends were $4. The net cash provided by (used in) investing activities for the year was:

Excerpts from Deblois Corporation's comparative balance sheet appear below: Which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method?

The following transactions occurred last year at Jolly Corporation: Based solely on the above information, the net cash provided by financing activities for the year on the statement of cash flows would be:

Sonier Corporation's most recent balance sheet appears below: The net income for the year was $97. Cash dividends were $19. The company did not issue any bonds or repurchase any of its common stock during the year. The net cash provided by (used in) financing activities for the year was:

Excerpts from Aultman Corporation's comparative balance sheet appear below: Which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method?

Kaeser Corporation's most recent balance sheet appears below: The company's net income for the year was $52 and it did not sell or retire any property, plant, and equipment during the year. Cash dividends were $9. The net cash provided by (used in) investing activities for the year was:

An increase in accounts receivable of $1,000 over the course of a year would be shown on the company's statement of cash flows prepared under the indirect method as:

When computing the net cash provided by operating activities using the indirect approach on the statement of cash flows, which item below would NOT be added to net income?

Adah Corporation prepares its statement of cash flows using the indirect method. Which of the following would be subtracted from net income in the operating activities section of the statement?

An increase in the Inventory account of a company from $10,000 at the beginning of the year to $15,000 at the end of the year would be shown on the company's statement of cash flows prepared under the indirect method as:

The following events occurred last year at Dorder Corporation: Based on the above information, the cash provided (used) by investing activities for the year on the statement of cash flows would net to:

The Warrel Corporation reported the following data for last year: Based solely on this information, the net cash provided (used) by financing activities on the statement of cash flows would be:

Excerpts from Neuwirth Corporation's comparative balance sheet appear below: Which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method?

Marbry Corporation's balance sheet and income statement appear below: Cash dividends were $21. The company did not issue any bonds or repurchase any of its own common stock during the year. The net cash provided by (used in) financing activities for the year was:

Klicker Corporation's most recent balance sheet appears below: The company's net income for the year was $152 and it did not issue any bonds or repurchase any of its common stock during the year. Cash dividends were $40. The net cash provided by (used in) financing activities for the year was:

Which of the following would be added to net income in the operating activities section of a statement of cash flows prepared using the indirect method?