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Multiple Choice Questions



This activity contains 14 questions.

Question 1.
All of the following are true regarding the cash flow statement except

 
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Question 2.
All of the following are true regarding the purpose of the statement of cash flows except

 
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Question 3.
Decision makers compare net income to net cash from operating activities. To make these amounts more comparable, the same accounts are included in each. The following accounts are used to compute both net income and net cash from operating activities except

 
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Question 4.
All of the following are true regarding the operating activity section of the cash flow statement except

 
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Question 5.
Use the following information to calculate net cash from operating activities: cash sales $100,000; cash from account receivable payments $200,000; cash dividends received $3,000; dividends paid $4,000; rent paid $5,000; and amortization expense $6,000.

 
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Question 6.
All of the following are true regarding the investing activity section of the cash flow statement except

 
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Question 7.
Use the following information to calculate net cash from investing activities: sell a capital asset for $10,000 cash and a $1,000 gain; purchase a bond investment for $16,000; receive $2,000 interest payment from the bond investment; and pay off a $3,000 mortgage payable.

 
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Question 8.
All of the following are true regarding the financing activity section of the cash flow statement except

 
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Question 9.

Use the following information to calculate net cash from financing activities: issue common shares $200,000; repurchase a company's own shares $20,000; pay mortgage payable principal $100,000; pay mortgage payable interest $10,000; a stock dividend is declared and distributed that reduces retained earnings by $30,000; and a cash dividend is declared and paid that reduces retained earnings by $40,000.
 
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Question 10.
The balance sheet reported a beginning balance of $20,000 in Accounts Receivable and an ending balance of $15,000. The income statement reported Sales Revenue of $200,000. Using this information, compute cash collected from customers.

 
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Question 11.

The balance sheet reported a beginning balance of $200,000 for the book value of equipment and an ending balance of $160,000. The income statement reported amortization expense of $20,000 and gain on the sale of equipment of $10,000. The cash flow statement reported acquisitions of capital assets totaling $30,000. Using this information, compute cash received from the sale of equipment.
 
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Question 12.
The indirect method shows the reconciliation from net income to operating cash flows. Select the adjustment that is subtracted during the reconciliation.

 
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Question 13.
The indirect method shows the reconciliation from net income to operating cash flows. Select the adjustment that is added during the reconciliation.

 
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Question 14.
The indirect method shows the reconciliation from net income to operating cash flows. Select the adjustment that is added during the reconciliation.

 
End of Question 14





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