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# FOR LINDA Are you available for assistance today? The quiz

FOR LINDA Are you available for assistance today? The quiz is timed (40 mins). About 20 multiple choice questions. ACTG 2021.

Hello and thank you for requesting me.
I am available. Can we start in half hour by 9 pm EST. I am almost home.

Customer: replied 4 years ago.
Cool, I will wait for you to reply at that time.
Customer: replied 4 years ago.
Ok, just a sec.
Customer: replied 4 years ago.
Question 1

In preparing the statement of cash flows, determining the net increase or decrease in cash requires the use of
the current period's retained earnings statement.
a comparative balance sheet.
a comparative income statement.
2 points
Question 2

A company had net income of \$242,000. Depreciation expense is \$26,000. During the year, accounts receivable and inventory increased \$15,000 and \$40,000, respectively. Prepaid expenses and accounts payable decreased \$2,000 and \$4,000, respectively. There was also a loss on the sale of equipment of \$3,000. How much cash was provided by operating activities?
\$207,000.
\$274,000.
\$295,000.
2 points
Question 3

The net income reported on the income statement for the current year was \$220,000. Depreciation was \$50,000. Accounts receivable and inventories decreased by \$10,000 and \$30,000, respectively. Prepaid expenses and accounts payable increased, respectively, by \$1,000 and \$8,000. How much cash was provided by operating activities?
\$317,000
\$301,000
\$239,000
2 points
Question 4

All of the following adjustments would be deducted in determining net cash provided by operating activities except a(n)
depreciation expense.
gain on sale of plant assets.
decrease in accrued expenses payable.
2 points
Question 5

In developing the cash flows from operating activities, most companies in the United States
use the indirect method.
present both the indirect and direct methods in their financial reports.
prepare the operating activities section on the accrual basis.
2 points
Question 6

Cash flows from operating activities, as reported on the statement of cash flows under the indirect method, would include
Answer receipts from the sale of investments.
net income.
payments for dividends.
receipts from the issuance of capital stock.
2 points
Question 7

Joy Elle's Vegetable Market had the following transactions during 2007:

1. Issued \$25,000 of par value common stock for cash.
2. Recorded and paid wages expense of \$10,000.
3. Acquired land by issuing common stock of par value \$50,000.
4. Declared and paid a cash dividend of \$1,000.
5. Sold a long-term investment (cost \$3,000) for cash of \$3,000.
6. Recorded cash sales of \$20,000.
7. Bought inventory for cash of \$2,000.
8. Acquired an investment in IBM stock for cash of \$6,000.
9. Converted bonds payable to common stock in the amount of \$10,000.
10. Repaid a 6 year note payable in the amount of \$11,000.
Reference: Ref 12-2

What is the net cash provided by financing activities?
\$25,000.
\$14,000.
\$9,000.
2 points
Question 8

Garden Corporation engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows. Assume the indirect method is used.
Reference: Ref 12-1

Purchased inventory with cash.
Investing activities section
Financing activities section
Does not represent a cash flow
2 points
Question 9

If a loss of \$12,500 is incurred in selling (for cash) office equipment having a book value of \$50,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is
\$50,000.
\$62,500.
\$12,500.
2 points
Question 10

Land costing \$125,000 was sold for \$155,000 cash. The gain on the sale was reported on the income statement as other income. On the statement of cash flows, what amount should be reported as an investing activity from the sale of land?
\$155,000
\$185,000
\$30,000
2 points
Question 11

A transaction involving a gain on the sale of equipment affects cash provided (used) by
operating and financing activities.
operating and investing activities.
operating, financing, and investing activities.
2 points
Question 12

Garden Corporation engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows. Assume the indirect method is used.
Reference: Ref 12-1

Paid income taxes.
Investing activities section
Financing activities section
Does not represent a cash flow
2 points
Question 13

Financing activities involve
acquiring investments.
issuing debt.
acquiring long-lived assets.
2 points
Question 14

The statement of cash flows will not provide insight into
Answer why dividends were not increased.
whether cash flow is greater than net income.
the exact proceeds of a future bond issue.
how the retirement of debt was accomplished.
2 points
Question 15

Preferred stock issued in exchange for land would be reported in the statement of cash flows in
Answer the cash flows from financing activities section.
the cash flows from investing activities section.
a separate schedule or note to the financial statements.
the cash flows from operating section.
2 points
Question 16

To determine the net cash provided (used) by operating activities, it is necessary to analyze
Answer the current year's income statement.
a comparative balance sheet.
all of the above.
2 points
Question 17

In calculating net cash provided by operating activities using the indirect method, an increase in prepaid expenses during a period is
ignored because it does not affect income.
ignored because it does not affect expenses.
2 points
Question 18

The category that is generally considered to be the best measure of a company's ability to continue as a going concern is
Answer cash flows from operating activities.
cash flows from investing activities.
cash flows from financing activities.
usually different from year to year.
2 points
Question 19

All of the following adjustments are added to net income in computing net cash provided by operating activities except
a decrease in accounts receivable.
an increase in accounts payable.
an increase in prepaid expenses.
2 points
Question 20

Which of the following items does not appear in the statement of cash flows under the direct method?
Working on it.
Customer: replied 4 years ago.
Question 20

Which of the following items does not appear in the statement of cash flows under the direct method?