Accounting 201Chapter 11 Practice Test Flashcards
Which of the following methods for preparing the statement of cash flows is acceptable under U.S. GAAP? A) The direct method. B) The indirect method. C) Both the direct and the indirect method are acceptable. D) The accrual accounting method.
C
Which of the following is the correct sequence of presenting the activities in the statement of cash flows? A) Investing activities, financing activities, operating activities. B) Operating activities, investing activities, financing activities. C) Operating activities, financing activities, investing activities. D) Financing activities, investing activities, operating activities.
B
Smith Company’s sales revenues for the year are $200,000 and its accounts receivable balance increased by $10,000. How much is “cash collected from customers”? A) $210,000. B) $200,000. C) $190,000. D) $10,000.
C
Which of the following is an example of a cash inflow from investing activities? A) Receipt of interest. B) Payment of cash dividends. C) Cash received from the sale of equipment. D) Receipt of cash dividends.
C
Depreciation expense is added to net income in the statement of cash flows - indirect method because: A) Cash was received. B) Cash was paid. C) Depreciation expense reduced net income, but is a noncash item. D) Depreciation is tax deductible.
C
The purchase of an intangible asset is classified in the statement of cash flows as a(n): A) Operating activity. B) Investing activity. C) Financing activity. D) Noncash activity.
B
The payment of semi-annual interest on outstanding bonds payable is classified in the statement of cash flows as a(n): A) Operating activity. B) Investing activity. C) Financing activity. D) Noncash activity.
A
We can identify investing activities from additional information and changes in: A) Current asset and current liability accounts. B) Long-term asset accounts. C) Long-term liability accounts. D) Stockholders’ equity accounts.
B
Which of the following is a noncash transaction? A) Purchase of long-term assets by issuing debt. B) Purchase of long-term assets by issuing stock. C) Conversion of bonds payable into common stock. D) All of these are noncash transactions.
D
Neuman Corporation’s income tax expense is $10,000 and its income tax payable decreased by $1,000 during the year. How much did Neuman pay for income taxes during the year? A) $11,000. B) $10,000. C) $9,000. D) $1,000.
A
