Question 1

In a statement of cash flows using the indirect method,an increase in available-for-sale securities not due to an increase in their fair value should be reported as:

Accepted Answer

An increase in available-for-sale securities not due to an increase in their fair value should be reported as a net cash outflow from investing activity as it represents the purchase of additional investment securities. This would not affect the net income calculation and would not be included in determining cash flows from operating activities.

Question 2

Which of the following is not classified as an operating activity?

Accepted Answer

Dividends paid on common stock are classified as financing activities, not operating activities. Operating activities involve the primary revenue-generating activities of the business, whereas financing activities involve ways in which a business finances its operations, including payments of dividends.

Question 3

Property dividends distributed are reported in connection with a statement of cash flows as:

Accepted Answer

Property dividends are considered a noncash activity and are disclosed in the notes to the financial statements rather than in the statement of cash flows.

Question 4

Goodfellow Corporation reported insurance expense of $477 for the current year.The beginning and ending balances in the prepaid insurance account were $50 and $30,respectively.What was the amount of cash paid for insurance?

Accepted Answer

The amount of insurance paid can be calculated using the formula:
Amount of insurance paid = Insurance expense for the year + Beginning balance of prepaid insurance - Ending balance of prepaid insurance
= $477 + $50 - $30
= $497 - $30
= $467
Therefore, the amount of cash paid for insurance was $457 (option B).

Question 5

Acquiring land with a long-term note is:

Accepted Answer

Acquiring land with a long-term note involves both an investing activity (acquiring an asset) and a financing activity (obtaining a long-term liability). However, since it doesn't involve any cash inflows or outflows, it is reported as a noncash investing and financing activity in the statement of cash flows.

Question 6

The purchase of treasury stock is:

Accepted Answer

The purchase of treasury stock is reported as a financing activity in the statement of cash flows because it involves transactions related to the company's own equity.

Question 7

Of the following,which is not an investing activity?

Accepted Answer

The answer of Of the following,which is not an investing...

Question 8

Proceeds from the sale of a plant site are:

Accepted Answer

Proceeds from the sale of a plant site are considered part of investing activities as it involves the sale of a long-term asset. Operating activities are related to revenue and expenses, while financing activities involve changes in liabilities and equity.

Question 9

A purchase of equipment for cash is:

Accepted Answer

A purchase of equipment for cash is an investing activity as it involves the acquisition of a long-term asset. Operating activities are related to the day-to-day operations of the business, while financing activities are related to the issuance or repayment of debt and equity.

Question 10

During 2016,T Company engaged in the following activities: 
In T's statement of cash flows,what were net cash outflows from financing activities for 2016?

Accepted Answer

The answer of During 2016,T Company engaged in the following...

Question 11

When treasury stock is sold at an amount less than its cost,the sale is classified as:

Accepted Answer

Treasury stock transactions are considered financing activities because they relate to the company's equity and how it finances its operations and growth, not its core operational activities or investments in long-term assets.

Question 12

In a statement of cash flows using the indirect method,an increase in available-for-sale securities due to an increase in their fair value should be reported as:

Accepted Answer

Available-for-sale securities' fair value changes are not reported in the cash flow statement as they do not involve actual cash transactions.

Question 13

A statement of cash flows and its related disclosure note typically do not report:

Accepted Answer

Stock dividends do not involve any cash payments or receipts and therefore do not affect the statement of cash flows.

Question 14

Freeman Company's accounting records include the following information:

What is the amount of net cash provided by operating activities indicated by these transactions?

Accepted Answer

The answer of Freeman Company's accounting records include the following...

Question 15

Which of the following is reported as a financing activity in the statement of cash flows?

Accepted Answer

The answer of Which of the following is reported as...

Question 16

Which of the following is reported as a financing activity in the statement of cash flows?

Accepted Answer

The acquisition of stock for the purpose of retiring it is a financing activity since it involves the use of funds to reduce the amount of outstanding equity shares. The sale of securities classified as available for sale is reported as an investing activity, the payment of interest on bonds payable is reported as an operating activity, and the receipt of dividend revenue is reported as an investing activity if the company is receiving dividends from investments in other companies or as an operating activity if the company is receiving dividends from its own investments.

Question 17

In preparing its cash flow statement for the year ended December 31,2016,Green Co.gathered the following data: 
In its December 31,2016,statement of cash flows,what amount should Green report as net cash from financing activities?

Accepted Answer

The answer of In preparing its cash flow statement for...

Question 18

Which of the following causes a change in cash?

Accepted Answer

Payment of a cash dividend declared in the previous fiscal year is the only option that directly involves the movement of cash. The other options reflect non-cash accounting entries such as interest payable, depreciation expense, and write-off of an uncollectible account.

Question 19

Melanie Corporation declared cash dividends of $13,500 during the current year.The beginning and ending balances in dividends payable were $450 and $750,respectively.What was the amount of cash paid for dividends?

Accepted Answer

The formula for cash paid for dividends is:
Cash paid for dividends = Dividends declared - Increase in dividends payable
Substituting the given values:
Cash paid for dividends = $13,500 - ($750 - $450) = $13,200
Therefore, the correct answer is choice letter D.

Question 20

Which of the following would not be a cash inflow from financing activities?

Accepted Answer

Cash from the sale of stock of a supplier is not a financing activity. It would be considered a cash inflow from investing activities. The other options, cash from issuing common stock, bonds, and preferred stock, are all examples of cash inflows from financing activities.

Quiz 21: The Statement of Cash Flows

In a statement of cash flows using the indirect method,an increase in available-for-sale securities not due to an increase in their fair value should be reported as:

Which of the following is not classified as an operating activity?

Property dividends distributed are reported in connection with a statement of cash flows as:

Goodfellow Corporation reported insurance expense of $477 for the current year.The beginning and ending balances in the prepaid insurance account were $50 and $30,respectively.What was the amount of cash paid for insurance?

Acquiring land with a long-term note is:

The purchase of treasury stock is:

Of the following,which is not an investing activity?

Proceeds from the sale of a plant site are:

A purchase of equipment for cash is:

During 2016,T Company engaged in the following activities: In T's statement of cash flows,what were net cash outflows from financing activities for 2016?

When treasury stock is sold at an amount less than its cost,the sale is classified as:

In a statement of cash flows using the indirect method,an increase in available-for-sale securities due to an increase in their fair value should be reported as:

A statement of cash flows and its related disclosure note typically do not report:

Freeman Company's accounting records include the following information: What is the amount of net cash provided by operating activities indicated by these transactions?

Which of the following is reported as a financing activity in the statement of cash flows?

Which of the following is reported as a financing activity in the statement of cash flows?

In preparing its cash flow statement for the year ended December 31,2016,Green Co.gathered the following data: In its December 31,2016,statement of cash flows,what amount should Green report as net cash from financing activities?

Which of the following causes a change in cash?

Melanie Corporation declared cash dividends of $13,500 during the current year.The beginning and ending balances in dividends payable were $450 and $750,respectively.What was the amount of cash paid for dividends?

Which of the following would not be a cash inflow from financing activities?