1. The Statement of Cash Flows:
2. The purchase of land is classified in the statement of cash flows as a(n):
3. The issuance of notes payable for borrowing is classified in the statement of cash flows as
a(n):
4. The purchase of treasury stock is classified in the statement of cash flows as a(n):
5. Operating cash flows exclude:
6. The statement of cash flows reports cash flows from the activities of:
7. Which one of the following is correct about the statement of cash flows?
8. Which of the following is correct about the statement of cash flows?
9. All classifications on the Balance Sheet have a general relationship with sections identified
on the Statement of Cash Flows. Indicate which relationships are correctly identified in the
table below.
10. Under what section of the Statement of Cash Flows would you classify dividends paid on
common stock?
11. Under what section of the Statement of Cash Flows would you classify the purchase of
equipment by issuing a long-term note payable?
12. Which of the following transactions would not create a cash flow?
13. Which of the following is an example of a noncash activity?
14. Which of the following is not true regarding cash flows?
15. Dividends received from an investment is classified as a(an) __________ cash flow, and
paying dividends on stock issued is classified as a(an) ____________ cash flow on the
Statement of Cash Flows.
16. The collection of cash from customers would be classified as which type of cash flow on
the Statement of Cash Flows?
17. The indirect and direct methods:
18. In the operating activities section of the statement of cash flows, we start with net income
when using:
19. Arrow Printers paid $2,000 interest on short-term notes payable, $10,000 interest on long-
term bonds, and $6,000 in dividends on its common stock. Arrow would report cash outflows
from activities, as follows:
20. Bad Brad’s would report net cash inflows (outflows) from operating activities in the
amount of:
21. Bad Brad’s would report net cash inflows (outflows) from investing activities in the
amount of:
22. Bad Brad’s would report net cash inflows (outflows) from financing activities in the
23. We can identify operating activities from income statement information and changes in
24. In preparing a statement of cash flows under the indirect method, a decrease in accounts
receivable would be reported or included as a(n):
25. In preparing a statement of cash flows under the indirect method, an increase in accounts
payable would be reported as a(n):
26. Which of the following is NOT a correct practice when adjusting net income to net
operating cash flows?
27. Which of the following is added to net income as an adjustment under the indirect method
of preparing the statement of cash flows?
28. Which of the following is deducted from net income as an adjustment under the indirect
method of preparing the statement of cash flows?
29. Given the items below, which of the following is a subtraction from net income to arrive
at Operating Cash Flows using the indirect method?
30. Rachel’s Recordings reported net income of $200,000. Beginning balances in Accounts
Receivable and Accounts Payable were $15,000 and $20,000, respectively. Ending balances
in these accounts were $12,000 and $22,000, respectively. Assuming that all relevant
information has been presented, Rachel’s cash flows from operating activities would be:
31. Mary’s Music Store reported net income of $135,000. Beginning balances in Accounts
Receivable and Accounts Payable were $29,000 and $26,000, respectively. Ending balances
in these accounts were $30,000 and $24,000, respectively. Assuming that all relevant
information has been presented, Mary’s cash flows from operating activities would be:
32. Kela Corporation reports net income of $450,000 that includes depreciation expense of
$70,000. Also, cash of $50,000 was borrowed on a 5-year note payable. Based on this data,
total cash inflows from operating activities are:
33. Assume net income was $100,000, depreciation expense was $8,000, accounts receivable
decreased by $7,500, and accounts payable decreased by $2,500. The amount of cash flows
from operating activities is:
34. Nevada Boot Co. reported net income of $205,000 Beginning and ending Inventory
balances were $40,000 and $45,000, respectively. Accounts Payable balances at the beginning
and end of the year were $35,000 and $33,000, respectively. Assuming that all relevant
information has been presented, Nevada Boot would report operating cash flows of:
35. Lense Laboratories’ net income was $250,000. Given the account information below, what
is the net operating cash flows for Lense Laboratories?
36. Allen Company’s income statement reported total revenues, $850,000 and total expenses
(including $40,000 depreciation) of $720,000. The balance sheet reported the following:
Accounts Receivable—beginning balance, $50,000 and ending balance, $60,000; Accounts
Payable—beginning balance, $22,000 and ending balance, $28,000. Therefore, based only on
this information, the net cash inflows from operating activities were:
37. Assuming Net Income for the year is $115,000, what is the Operating Cash Flows given
the following information:
38. Which of the following statements is true?
39. Which of the following is an example of a cash outflow from an investing activity?
40. Which of the following is an example of a cash inflow from a financing activity?
41. _________ is an investing cash flow and ________ is a financing cash flow, as reported
on the Statement of Cash Flows.
42. Cash flows from investing activities do not include cash flows from:
43. Cash flows from financing activities include:
44. Cash flows from investing activities do not include:
45. Shively Mfg. Co. sold land costing $10,000 for $12,000. Shively would report:
46. During 2012, Smithson Corp. had the following cash flows: receipt from customers,
$10,000; receipt from the bank for long-term borrowing, $6,000; payment to suppliers,
$5,000; payment of dividends, $1,000, payment to workers, $2,000; and payment for
machinery, $8,000. What amount would be reported for investing cash flows on the Statement
of Cash Flows?