Chapter 13 – Statement of Cash Flows
Copyright Cengage Learning. Powered by Cognero.
Page 11
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.13–02 – LO: 13–02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.24 – Statement of Cash Flows
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:33 PM
DATE MODIFIED:
10/16/2017 6:30 PM
29. If cash dividends of $135,000 were paid during the year and the company sold 1,000 shares of common stock at $30
per share, the statement of cash flows would report net cash flow from financing activities as $165,000.
a.
True
b.
False
ANSWER:
False
RATIONALE:
Net cash flow from financing activities = Cash received from sale of common stock –
Cash paid for dividends = (1,000 × $30) – $135,000 = ($105,000)
POINTS:
1
DIFFICULTY:
Bloom’s: Applying
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.13–04 – LO: 13–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.24 – Statement of Cash Flows
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:33 PM
DATE MODIFIED:
10/16/2017 6:30 PM
30. The declaration and issuance of a stock dividend would be reported on the statement of cash flows.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Bloom’s: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.13–04 – LO: 13–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.24 – Statement of Cash Flows
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:33 PM
DATE MODIFIED:
10/16/2017 6:30 PM
Copyright Cengage Learning. Powered by Cognero.
Page 12
31. If 800 shares of $40 par common stock are sold for $43,000, the $43,000 would be reported in the cash flows from
financing activities section of the statement of cash flows.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Bloom’s: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.13–04 – LO: 13–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.24 – Statement of Cash Flows
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:33 PM
DATE MODIFIED:
10/16/2017 6:30 PM
32. If $475,000 of bonds payable are sold at 101, $475,000 would be reported in the cash flows from financing activities
section of the statement of cash flows.
a.
True
b.
False
ANSWER:
False
RATIONALE:
Net cash flows from financing activities = Par value of bonds × (101 / 100) = $475,000
× (101 / 100) = $479,750
POINTS:
1
DIFFICULTY:
Bloom’s: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.13–04 – LO: 13–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.24 – Statement of Cash Flows
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:33 PM
DATE MODIFIED:
10/16/2017 6:30 PM
33. Net income was $51,000 for the year. The accumulated depreciation balance increased by $14,000 over the
year. There were no sales of fixed assets or changes in noncash current assets or liabilities. Under the indirect method,
the cash flow from operations is $37,000.
a.
True
b.
False
ANSWER:
False
RATIONALE:
Cash flow from operations = Net income + Depreciation expense = $51,000 + $14,000
= $65,000
POINTS:
1
DIFFICULTY:
Bloom’s: Applying
Chapter 13 – Statement of Cash Flows
Copyright Cengage Learning. Powered by Cognero.
Page 16
ANSWER:
True
POINTS:
1
DIFFICULTY:
Bloom’s: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.13–03 – LO: 13–03
FNMN.WAJO.19.13–04 – LO: 13–04
FNMN.WAJO.19.13–APP2 – LO: 13–APP2
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.24 – Statement of Cash Flows
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:33 PM
DATE MODIFIED:
10/16/2017 6:30 PM
42. Under the direct method of preparing a statement of cash flows, the gain on the sale of land is not adjusted or reported
as part of cash flows from operating activities.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Bloom’s: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.13–02 – LO: 13–02
FNMN.WAJO.19.13–APP2 – LO: 13–APP2
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.24 – Statement of Cash Flows
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:33 PM
DATE MODIFIED:
10/16/2017 6:30 PM
43. The manner of reporting cash flows from investing and financing activities will be different under the direct method as
compared to the indirect method.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Bloom’s: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.13–03 – LO: 13–03
FNMN.WAJO.19.13–04 – LO: 13–04
FNMN.WAJO.19.13–APP2 – LO: 13–APP2
Chapter 13 – Statement of Cash Flows
Copyright Cengage Learning. Powered by Cognero.
Page 18
ANSWER:
False
POINTS:
1
DIFFICULTY:
Bloom’s: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.13–APP2 – LO: 13–APP2
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.24 – Statement of Cash Flows
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:33 PM
DATE MODIFIED:
10/16/2017 6:30 PM
47. To determine cash payments for operating expenses for the statement of cash flows using the direct method, a
decrease in accrued expenses is added to operating expenses other than depreciation.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Bloom’s: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.13–APP2 – LO: 13–APP2
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.24 – Statement of Cash Flows
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:33 PM
DATE MODIFIED:
10/16/2017 6:30 PM
48. To determine cash payments for income taxes for the statement of cash flows using the direct method, an increase in
income taxes payable is added to the income tax expense.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Bloom’s: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.13–APP2 – LO: 13–APP2
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.24 – Statement of Cash Flows
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:33 PM
DATE MODIFIED:
10/16/2017 6:30 PM
Copyright Cengage Learning. Powered by Cognero.
Page 19
49. Free cash flow is the measure of operating cash flow available for corporate purposes after providing sufficient fixed
asset additions to maintain current operations.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Bloom’s: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.13–06 – LO: 13–06
ACCREDITING STANDARDS:
ACBSP-APC–23 – Financial Statement Analysis
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:33 PM
DATE MODIFIED:
10/16/2017 6:30 PM
50. When using the spreadsheet (work sheet) method to analyzing noncash accounts, no order of analysis is required, but
it is more efficient to start with Retained Earnings and proceed upward in the account listing.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Bloom’s: Remembering
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.13–APP1 – LO: 13–APP1
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.24 – Statement of Cash Flows
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:33 PM
DATE MODIFIED:
10/16/2017 6:30 PM
51. Which of the following is not one of the four basic financial statements?
a.
balance sheet
b.
statement of cash flows
c.
statement of changes in financial position
d.
income statement
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
