Question : 41.Which of the following would be reported as a financing : 1257089

 

 

41.Which of the following would be reported as a financing activity on the statement of cash flows?   

A. Dividends collected from an investment in marketable securities.

 

B. Note payable issued to purchase equipment.

 

C. Purchase of investment securities.

 

D. Cash paid for the purchase of treasury stock.

 

 

42.In 2014, Wade Company reported wages expense of $32,000. The beginning balance in wages payable was $1,200, and at the end of the year, the balance in wages payable was $1,700. What was the amount of cash that Wade paid for employee wages during the year?   

A. $29,100

 

B. $31,500

 

C. $34,400

 

D. $32,500

 

 

43.In 2014, Pingry Company’s accounts receivable balance increased by $14,000. The company’s income statement reports sales revenue of $437,500, all on account. How much cash did Pingry collect on accounts receivable during the year?   

A. $437,500

 

B. $451,500

 

C. $423,500

 

D. None of these answers is correct.

 

 

44.What are the two methods used to prepare the statement of cash flows?   

A. Indirect and direct

 

B. Inflow and outflow

 

C. Sources and uses

 

D. Cash and noncash

 

 

45.The difference between the direct and the indirect method applies only to cash from what type of activity?   

A. Operating

 

B. Investing

 

C. Financing

 

D. All of these answers are correct.

 

 

46.Under the indirect method, which of the following is not an item that is added back to net income in determining net cash flow from operating activities?   

A. Decrease in accounts receivable

 

B. Decrease in inventory

 

C. Depreciation expense

 

D. Gain on sale of store fixtures

 

 

47.When the indirect method is used to prepare the statement of cash flows, what is the starting point of the operating activities section?   

A. Net income as reported on the income statement

 

B. Total assets as reported on the balance sheet

 

C. Sales as reported on the income statement

 

D. Cash collections from customers

 

 

48.Depreciation for the year was $80,000 and net income was $323,000. Assume the rest of the company’s transactions were cash transactions. How much was net cash from operating activities?   

A. $243,000

 

B. $403,000

 

C. $323,000

 

D. None of these answers is correct.

 

 

49.Which of the following statements is incorrect regarding preparing a statement of cash flows using the direct method?   

A. The direct method shows adjustments to net income.

 

B. The direct method shows the specific sources and uses of cash that are associated with operating activities.

 

C. Noncash expenses, gains, and losses are not used in the determination of net cash flow from operating activities.

 

D. A majority of companies use the indirect method rather than the direct method.

 

 

50.Which of the following is not an adjustment when arriving at net cash provided by operating activities under the indirect method?   

A. Noncash expenses such as depreciation expense

 

B. Gains and losses on the sale of long-term assets

 

C. Changes in a company’s long-term assets

 

D. Changes in noncash current asset and current liability accounts