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Exam 9: The Statement of Cash Flows

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Question 1

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Cash equivalents are highly liquid short-term investments that can be converted into cash quickly.

A) True
B) False

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Question 2

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Under the direct method, cash receipts from dividend revenue affect both the statement of cash flows and the income statement.

A) True
B) False

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Question 3

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Proceeds from the issuance of shares appear in which, if any, section of the cash flow statement?

Which of the following would not appear on a statement of cash flows prepared using the direct method?

Geographic Enterprise's Inventory account decreased $37,500 and its Accounts Payable account (which relates solely to the purchase of merchandise) decreased $13,760 during the year. Geographic also reported sales of $856,000 and cost of goods sold of $597,600 during the same period. Geographic's payments to suppliers for inventory during the year were:

Under ASPE which of the following is not an example of an operating activity?

The issuance of bonds for cash would be reported on a statement of cash flows under the:

The balance in Common Shares on January 1, 2020, and December 31, 2020, is respectively $145,000 and $172,500. During the year, $57,000 repurchase of shares was recorded. During the Year, shares were issued. The proceeds from the issue of shares amounted to:

The statement of cash flows reports the investments the company is making in non-current assets.

The issuance of common shares in exchange for land and equipment will:

Given the following information for Rat Rack Corporation: cost of goods sold $35,500, sales $65,000, increase in accounts receivables $4,200. Their receipts from customers total would be:

Phosphoric Company reported capital assets, net of accumulated depreciation, on January 1, 2020, at $645,000 and $732,500 on December 31, 2020. The income statement showed depreciation of $48,300 and a $5,600 loss on sale of capital assets. Phosphoric Company acquired $213,000 of capital assets during the year. The proceeds from the sale of capital assets were:

Which of the following would appear on a direct method statement of cash flows?

Retained Earnings had a balance on January 1, 2020, and December 31, 2020, respectively, of $234,500 and $411,000. Net income for the year was $199,500 and the only other event affecting Retained Earnings was the declaration of dividends. If there was no change in the Dividends account during the year, the payments for dividends was:

Loans and advances to others are financing activities on a statement of cash flows.

Land Reclamation Industries began the year with $46,700 in Accounts Receivable and ended the year with $31,900 in Accounts Receivable. If sales for the year were $687,000, the cash collected from customers during the year amounted to:

Which of the following activities creates revenues and expenses in a company's major line of business?

Which of the following transactions would not be shown on a statement of cash flows?

Cash means more than just cash on hand and cash in the bank. Highly liquid, short-term investments that are easily convertible into cash are called:

Under ASPE the payment of principal and interest on a loan would be reported in the investing activities section of a statement of cash flows.