Question : 21.Which one of the following consistent with a company recording : 1241773

 

 

21.Which one of the following is consistent with a company recording a large operating loss but still having healthy cash flows from operations?

a.A large amount of depreciation and/or amortization expense

b.An increase in accounts receivable and inventory

c.A decrease in accounts payable

d.All sales are on a cash basis.

 

 

 

22.Which one of the following is consistent with a company recording a large operating income but having a net cash outflow from operations?

a.A great amount of depreciation expense

b.An increase in accounts receivable and inventory

c.An increase in accounts payable

d.Acquisition of new plant assets for cash

 

 

 

23.Which one of the following is added to net income in determining cash flows from operations?

a.Decrease in amounts paid to reduce long-term notes

b.Decrease in accounts payable

c.Depreciation or amortization

d.Cash received from selling treasury stock

 

 

 

24.Which one of the following is added to net income in determining cash flows from operations?

a.Amortization of intangibles

b.Decrease in accounts payable

c.Increase in accounts receivable

d.A gain on the sale of plant assets

 

 

25.Which one of the following is added to net income in determining cash flows from operations?

a.Cash dividends paid

b.Increase in accounts payable and decrease in accounts receivable

c.Decrease in accounts receivable and cash dividends declared

d.Increase in prepaid expenses

 

 

 

26.Which one of the following is added to net income in determining cash flows from operations?

a.Increase in inventory

b.Decrease in wages payable

c.Loss from sale of land

d.Gain from selling treasury stock above its original cost

 

 

 

27.Which one of the following is subtracted from net income in determining cash flows from operations?

a.Loss from sale of land

b.Depreciation expense

c.Stock dividends declared and distributed

d.Gain from sale of equipment

 

 

 

28.Which one of the following is subtracted from net income in determining cash flows from operations?

a.Increase in prepaid insurance

b.Increase in accounts payable

c. Decrease in accounts receivable

d. Decrease in prepaid insurance

 

 

 

29.The primary purpose of the statement of cash flows is to provide information

a. about the revenue and expenses of an entity’s operations during a period.

b. that predicts future cash flows.

c. about the operating, investing, and financing activities of an entity during a period.

d. about the entity’s ability to meet its obligations, its ability to pay dividends, and its needs for external financing.

 

 

 

30.An increase in inventory is reported in a statement of cash flows using the indirect method as a(n)

a. addition to net income in arriving at net cash flows from operating activities.

b. deduction from net income in arriving at net cash flows from operating activities.

c. cash outflow from investing activities.

d. cash outflow from financing activities.