Question :
Multiple Choice Questions
176. The statement of cash flows designed to assist : 1229439
Multiple Choice Questions
176. The statement of cash flows is designed to assist users in assessing each of the following, except:
A. The ability of a company to remain liquid.
B. The major sources of cash receipts during the period.
The company’s profitability.
D. The reasons why net cash flow from operating activities differ from net income.
177. Which of the following is not included in the statement of cash flows, or in a supplementary schedule accompanying the statement of cash flows?
A. Disclosure of investing or financing activities that did not involve cash.
B. A reconciliation of net income to net cash flows from operating activities.
Disclosure of the amount of cash invested in money market funds during the accounting period.
D. The amount of cash and cash equivalents owned by the business at the end of the accounting period.
178. Cash flows are grouped in the statement of cash flows into the following major categories:
Operating activities, investing activities, and financing activities.
B. Cash receipts, cash disbursements, and noncash activities.
C. Direct cash flows and indirect cash flows.
D. Operating activities, investing activities, and collecting activities.
179. Shown below is a list of various cash payments and cash receipts:
Cash paid to suppliers and employees $420,000
Dividends paid $18,000
Interest paid $12,000
Purchases of plant assets $45,000
Interest and dividends received $17,000
Payments to settle short-term bank loans $29,000
Income taxes paid $23,000
Cash received from customers $601,000
Based only on the above items, net cash flows from operating activities are:
A. $138,000.
B. $91,000.
C. $120,000.
D. $163,000.
180. During the current year, two transactions were recorded in the Land account of Duke Industries. One involved a debit of $320,000 to the Land account; the second was a $210,000 credit to the Land account. Duke’s income statement for the year reported a loss on sale of land in the amount of $25,000. All transactions involving the Land account were cash transactions. These transactions would be shown in the statement of cash flows as:
A. $320,000 cash provided by investing activities, and $210,000 cash disbursed for investing activities.
B. $185,000 cash provided by investing activities, and $320,000 cash disbursed for investing activities.
C. $235,000 cash provided by investing activities, and $320,000 cash disbursed for investing activities.
D. $210,000 cash provided by investing activities, and $320,000 cash disbursed for investing activities.
181. Which of the following business strategies is most likely to increase the net cash flows of a software developer in the short run but reduce them over a longer term?
A. Develop software that is more costly to create but easier to update and improve.
B. Lower the price of existing versions of products as customer demand begins to fall.
C. Reduce expenditures for the purpose of developing new products.
D. Purchase the building in which the business operates (assume the company currently rents this location).
