Question : 11.A company uses the indirect method of preparing the statement : 1241772

 

 

11.A company uses the indirect method of preparing the statement of cash flows. Current year depreciation expense can be found on the

a.income statement and statement of cash flows.

b.balance sheet and income statement.

c.statement of cash flows and balance sheet.

d.income statement and statement of comprehensive income.

 

 

12.A company uses the direct method of preparing the statement of cash flows. Current year depreciation expense can be found on the

a.balance sheet and income statement.

b.income statement and statement of cash flows.

c.statement of cash flows and balance sheet.

d.income statement only.

e.statement of cash flows only.

 

 

 

13.An investor is interested in assessing the effectiveness of a company’s cash management. Where will the investor look to evaluate this?

a.Statement of cash flows

b.Income statement

c.Balance sheet

d.Company’s bank statements

 

 

 

14.A company declares cash dividends on the last day of the year. Payment will be made during the following fiscal period. Cash flows

a. from operations will be less than if dividends were not declared.

b. from operations will be more than if dividends were not declared.

c. from investing activities will be less than if dividends were not declared.

d. from financing activities will be less than if dividends were not declared.

e.will be the same as if dividends had not been declared.

 

 

 

15. What is reported on the statement of cash flows?

a.Operating, investing, and financing activities of an entity for a period of time

b.All revenues and expense listed by operating, financing, and operating activity

c. Operating, investing, and financing activities of an entity at the balance sheet date

d. A detail of all incoming and outgoing cash flows of a business

 

 

16.Which statement is true with respect to the preparation of the cash flows from operating activities’ section?

a. It can be calculated by using the direct or indirect methods.

b. Cash flows are calculated as the difference between revenues and expenses.

c. It is always equal to accrual accounting income.

d. Cash payments for depreciation and dividends are reported in the operating activates sections.

 

 

 

17.Which one of the following transactions is an investing activity?

a. Sale of equipment at book value

b. Sale of merchandise on credit

c. Declaration of cash dividend

d. Issuance of bonds payable at a discount

 

 

 

18.How will a company classify the income tax payments on its statement of cash flows?

a. Operating activities

b. Taxing activities

c. Lending activities

d. Financing activities

 

 

 

19.A company uses straight-line instead of the units of production method of depreciation. Assuming a tax rate of zero, which statement is true as a result of its choice of depreciation methods?

a. Cash flows from operations will be less than under the straight-line method

b. Cash flows from operations will be more than under the straight-line method

c. Cash used for investing activities will be more than under the straight-line method

d. Cash used for investing activities will be less than under the straight-line method.

e.Cash flows are the same as if the straight-line method had been used.

 

 

 

20.An acquisition of land by signing a 10-year mortgage payable is reported on the statement of cash flows as

a. an operating activity.

b.an investing activity.

c.a financing activity.

d. a footnote.