2023年财务会计英语练习及答案ch6

CHAPTER16

STATEMENTOFCASHFLOWS

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Chapter16—StatementofCashFlows

TRUE/FALSE

1.Thestatementofcashflowsisnotoneofthebasicfinancialstatements.

ANS:FDIF:1OBJ:01

2.Cash,asthetermisusedfbrthestatementofcashflows,couldindicateeithercashorcash

equivalents.

ANS:TDIF:1OBJ:01

3.Thestatementofcashflowsisanoptionalfinancialstatement.

ANS:FDIF:1OBJ:01

4.Thestatementofcashflowsshowstheeffectsoncashofacompany'soperating,investing,

andfinancingactivities.

ANS:TDIF:1OBJ:01

5.Thestatementofcashflowsreportsafirm'smajorsourcesofcashreceiptsandmajorusesof

cashpaymentsforaperiod.

ANS:TDIF:1OBJ:01

6.Cashflowsfromoperatingactivities,aspartofthestatementofcashflows,includecash

transactionsthatenterintothedeterminationofnetincome.

ANS:TDIF:1OBJ:01

7.Toarriveatcashflowsfromoperations,itisnecessarytoconverttheincomestatementfrom

anaccrualbasistothecashbasisofaccounting.

ANS:TDIF:2OBJ:01

8.Cashflowsfrominvestingactivities,aspartofthestatementofcashflows,includereceipts

fromthesaleofland.

ANS:TDIF:2OBJ:01

9.Cashflowsfromfinancingactivities,aspartofthestatementofcashflows,include

paymentsfordividends.

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ANS:TDIF:2OBJ:01

10.Cashflowsfrominvestingactivities,aspartofthestatementofcashflows,include

paymentsforthepurchaseoftreasurystock.

ANS:FDIF:2OBJ:01

11.Cashflowsfrominvestingactivities,aspartofthestatementofcashflows,includereceipts

fromtheissuanceofbondspayable.

ANS:FDIF:2OBJ:01

12.Therearetwoalternativestoreportingcashflowsfromoperatingactivitiesinthestatement

ofcashflows:(1)thedirectmethodand(2)theindirectmethod.

ANS:TDIF:1OBJ:01

13.Thedirectmethodofpreparingtheoperatingactivitiessectionofthestatementofcash

flowsreportsmajorclassesofgrosscashreceiptsandgrosscashpayments.

ANS:TDIF:1OBJ:01

14.Underthedirectmethodofreportingcashflowsfromoperations,themajorsourceofcashis

cashreceivedfromcustomers.

ANS:TDIF:1OBJ:01

15.Themaindisadvantageofthedirectmethodofreportingcashflowsfromoperating

activitiesisthatthenecessarydataareoftencostlytoaccumulate.

ANS:TDIF:2OBJ:01

16.Amajordisadvantageoftheindirectmethodofreportingcashflowsfromoperating

activitiesisthatthedifferencebetweenthenetamountofcashflowsfromoperating

activitiesandnetincomeisnotemphasized.

ANS:FDIF:2OBJ:01

17.Cashoutflowsfromfinancingactivitiesincludethepaymentofcashdividends,the

acquisitionoftreasurystock,andtherepaymentofamountsborrowed.

ANS:TDIF:2OBJ:01

18.Cashflowsfrominvestingactivities,aspartofthestatementofcashflows,include

paymentsfortheacquisitionoffixedassets.

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19.Theacquisitionoflandinexchangefbrcommonstockisanexampleofnoncashinvesting

andfinancingactivity.

ANS:TDIF:2OBJ:01

20.Ifabusinessissuedbondspayableinexchangeforland,thetransactionwouldbereportedin

aseparatescheduleonthestatementofcashflows.

ANS:TDIF:2OBJ:01

21.Acashflowpershareamountshouldbereportedonthestatementofcashflows.

ANS:FDIF:1OBJ:01

22.Althoughthereisnoorderinwhichthenoncashbalancesheetaccountsmustbeanalyzedin

determiningdataforpreparingthestatementofcashflowsbytheindirectmethod,timecan

besavedandgreateraccuracycanbeachievedbyselectingtheaccountsinthereverseorder

inwhichtheyappearonthebalancesheet.

ANS:TDIF:1OBJ:02

23.The2002editionofAccountingTrendsandTechniquesreportedthat90%ofthecompanies

surveyedusedtheindirectmethodtoreportchangesincashflowsfromoperations.

ANS:FDIF:2OBJ:02

24.Rarelywouldthecashflowsfromoperatingactivities,asreportedonthestatementofcash

flows,bethesameasthenetincomereportedontheincomestatement.

ANS:TDIF:2OBJ:02

25.Iflandcosting$75,000wassoldfor$135,000,theamountreportedintheinvesting

activitiessectionofthestatementofcashflowswouldbe$75,000.

ANS:FDIF:2OBJ:02

26.Iflandcosting$150,000wassoldfor$205,000,the$55,000gainonthesalewouldbe

addedtonetincomeinconvertingthenetincomereportedontheincomestatementtocash

flowsfromoperatingactivitiesforthestatementofcashflowspreparedbytheindirect

method.

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27.Inpreparingthecashflowsfromoperatingactivitiessectionofthestatementofcashflows

bytheindirectmethod,thenetdecreaseininventoriesfromthebeginningtotheendofthe

periodisaddedtonetincomefortheperiod.

ANS:TDIF:2OBJ:02

28.Indeterminingthecashflowsfromoperatingactivitiesforthestatementofcashflowsby

theindirectmethod,thedepreciationexpensefortheperiodisaddedtothenetincomefor

theperiod.

ANS:TDIF:2OBJ:02

29.Inpreparingthecashflowsfromoperatingactivitiessectionofthestatementofcashflows

bytheindirectmethod,theamortizationofbonddiscountfortheperiodisdeductedfrom

thenetincomefortheperiod.

ANS:FDIF:2OBJ:02

30.Ifcashdividendsof$145,000weredeclaredduringtheyearandthedecreaseindividends

payablefromthebeginningtotheendoftheyearwas$7,000,thestatementofcashflows

wouldreport$152,000inthefinancingactivitiessection.

ANS:TDIF:2OBJ:02

31.Thedeclarationandissuanceofastockdividendwouldbereportedonthestatementofcash

flows.

ANS:FDIF:2OBJ:02

32.If900sharesof$40parcommonstockaresoldfor$48,000,the$48,000wouldbereported

inthecashflowsfromfinancingactivitiessectionofthestatementofcashflows.

ANS:TDIF:2OBJ:02

33.If$500,000ofbondspayablearesoldat101,$500,00()wouldbereportedinthecashflows

fromfinancingactivitiessectionofthestatementofcashflows.

ANS:FDIF:2OBJ:02

34.Netincomewas$52,000fortheyear.Theaccumulateddepreciationbalanceincreasedby

$17,000overtheyear.Therewerenosalesoffixedassetsorchangesinnoncashcurrent

assetsorliabilities.Thecashflowfromoperationsis$35,000

ANS:FDIF:2OBJ:02

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35.Netincomefortheyearwas$29,000.Accountsreceivableincreased$2,500,andaccounts

payableincreased$5,100.Thecashflowfromoperationsis$31,600.

ANS:TDIF:2OBJ:02

36.Abuildingwithacostof$153,000andaccumulateddepreciationof$42,000wassoldforan

$11,000gain.Thecashgeneratedfromthisinvestingactivitywas$121,000.

ANS:FDIF:2OBJ:02

37.Theindirectmethodreportscashreceivedfromcustomersinthecashflowsfromoperating

activitiessectionofthestatementofcashflows.

ANS:FDIF:2OBJ:02

38.Cashpaidtoacquiretreasurystockshouldbeshownonthestatementofcashflowsfrom

investingactivities.

ANS:FDIF:2OBJ:02

39.Repaymentsofbondswouldbeshownasacashoutflowintheinvestingsectionofthe

statementofcashflows.

ANS:FDIF:2OBJ:02

40.Acquiringequipmentbyissuingasix-monthnoteshouldbeshownonthestatementofcash

flowsundertheinvestingactivitiessection.

ANS:FDIF:2OBJ:02

41.Inreportingcashflowsfrominvestingactivitiesonthestatementofcashflows,thecash

inflowsareusuallyreportedfirst,followedbythecashoutflows.

ANS:TDIF:1OBJ:02

42.

Cashinflowsandoutflowsarenotnettedinanyactivitysectionofthestatementofcash

flowsbutareseparatelydisclosedtogivethereaderfullinformation.

ANS:TDIF:1OBJ:02

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43.Themannerofreportingcashflowsfrominvestingandfinancingactivitieswillbedifferent

underthedirectmethodascomparedtotheindirectmethod.

ANS:FDIF:1OBJ:03

44.Salesreportedontheincomestatementwere$375,000.Theaccountsreceivablebalance

declined$6,500overtheyear.Theamountofcashreceivedfromcustomerswas

$368,500.

ANS:FDIF:2OBJ:03

45.Todeterminecashpaymentsformerchandiseforthecashflowstatementusingthedirect

method,adecreaseinaccountspayableisaddedtothecostofmerchandisesold.

ANS:TDIF:2OBJ:03

46.Todeterminecashpaymentsforoperatingexpensesforthecashflowstatementusingthe

directmethod,adecreaseinprepaidexpensesisaddedtooperatingexpensesotherthan

depreciation.

ANS:FDIF:2OBJ:03

47.Todeterminecashpaymentsforoperatingexpensesforthecashflowstatementusingthe

directmethod,adecreaseinaccruedexpensesisaddedtooperatingexpensesotherthan

depreciation.

ANS:TDIF:2OBJ:03

48.Todeterminecashpaymentsforincometaxforthecashflowstatementusingthedirect

method,anincreaseinincometaxespayableisaddedtotheincometaxexpense.

ANS:FDIF:2OBJ:03

49.Freecashflowiscashflowfromoperations,lesscashusedtopurchasefixedassetsto

maintainproductivecapacityandcashusedfordividends.

ANS:TDIF:1OBJ:04

50.Freecashflowisthemeasureofoperatingcashflowavailableforcorporatepurposesafter

providingsufficientfixedassetadditionstomaintaincurrentproductivecapacityand

dividends.

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MULTIPLECHOICE

1.Whichofthefollowingisnotoneofthefourbasicfinancialstatements?

a.balancesheet

b.statementofcashflows

c.statementofchangesinfinancialposition

d.incomestatement

ANS:CDIF:1OBJ:01

2.Whichofthefollowingconceptsofcashisnotappropriatetouseinpreparingthestatement

ofcashflows?

a.cash

b.cashandmoneymarketfunds

c.cashandcashequivalents

d.cashandU.S.treasurybonds

ANS:DDIF:2OBJ:01

3.Thestatementofcashflowsreports

a.cashflowsfromoperatingactivities

b.totalassets

c.totalchangesinstockholders*equity

d.changesinretainedearnings

ANS:ADIF:1OBJ:01

4.Onthestatementofcashflows,thecashflowsfromoperatingactivitiessectionwould

include

a.receiptsfromtheissuanceofcapitalstock

b.receiptsfromthesaleofinvestments

c.paymentsfortheacquisitionofinvestments

d.cashreceiptsfromsalesactivities

ANS:DDIF:2OBJ:01

5.Preferredstockissuedinexchangeforlandwouldbereportedinthestatementofcashflows

in

a.thecashflowsfromfinancingactivitiessection

b.thecashflowsfrominvestingactivitiessection

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c.aseparateschedule

d.thecashflowsfromoperatingactivitiessection

ANS:CDIF:2OBJ:01

6.Cashpaidtopurchaselong-terminvestmentswouldbereportedinthestatementofcash

flowsin

a.thecashflowsfromoperatingactivitiessection

b.thecashflowsfromfinancingactivitiessection

c.thecashflowsfrominvestingactivitiessection

d.aseparateschedule

ANS:CDIF:2OBJ:01

7.Astatementofcashflowswouldnotdisclosetheeffectsofwhichofthefollowing

transactions?

a.stockdividendsdeclared

b.bondspayableexchangedforcapitalstock

c.purchaseoftreasurystock

d.capitalstockissuedtoacquirefixedassets

ANS:ADIF:2OBJ:01

8.Whichofthefollowingdoesnotrepresentanoutflowofcashandthereforewouldnotbe

reportedonthestatementofcashflowsasauseofcash?

a.purchaseofnoncurrentassets

b.purchaseoftreasurystock

c.discardinganassetthathadbeenfullydepreciated

d.paymentofcashdividends

ANS:CDIF:2OBJ:01

9.Whichofthefollowingrepresentsaninflowofcashandthereforewouldbereportedonthe

statementofcashflows?

a.appropriationofretainedearnings

b.acquisitionoftreasurystock

c.declarationofstockdividends

d.issuanceoflong-termdebt

ANS:DDIF:2OBJ:01

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10.Aten-yearbondwasissuedatparfor$150,000cash.Thistransactionshouldbeshownon

astatementofcashflowsunder

a.investingactivities

b.financingactivities

c.noncashinvestingandfinancingactivities

d.operatingactivities

ANS:BDIF:1OBJ:01

11.Cashpaidforpreferredstockdividendsshouldbeshownonthestatementofcashflows

under

a.investingactivities

b.financingactivities

c.noncashinvestingandfinancingactivities

d.operatingactivities

ANS:BDIF:2OBJ:01

12.Thelastitemonthestatementofcashflowspriortothescheduleofnoncashinvestingand

financingactivitiesreports

a.theincreaseordecreaseincash

b.cashattheendoftheyear

c.netcashflowfrominvestingactivities

d.netcashflowfromfinancingactivities

ANS:BDIF:2OBJ:01

13.Whichofthefollowingisanoncashinvestingandfinancingactivity?

a.paymentofacashdividend

b.paymentofasix-monthnotepayable

c.purchaseofmerchandiseinventoryonaccount

d.issuanceofcommonstocktoacquireland

ANS:DDIF:2OBJ:01

14.Whichofthefollowingshouldbeshownonastatementofcashflowsunderthefinancing

activitysection?

a.thepurchaseofalong-terminvestmentinthecommonstockofanothercompany

b.thepaymentofcashtoretirealong-termnote

c.theproceedsfromthesaleofabuilding

d.theissuanceofalong-termnotetoacquireland

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15.Acompanypurchasesequipmentfor$29,000cash.Thistransactionshouldbeshownon

thestatementofcashflowsunder

a.investingactivities

b.financingactivities

c.noncashinvestingandfinancingactivities

d.operatingactivities

ANS:ADIF:2OBJ:01

16.Cashflowpershareis

a.requiredtobereportedonthebalancesheet

b.requiredtobereportedontheincomestatement

c.requiredtobereportedonthestatementofcashflows

d.notrequiredtobereportedonanystatement

ANS:DDIF:1OBJ:01

17.Onthestatementofcashflowspreparedbytheindirectmethod,thecashflowsfrom

operatingactivitiessectionwouldinclude

a.receiptsfromthesaleofinvestments

b.amortizationofpremiumonbondspayable

c.paymentsforcashdividends

d.receiptsfromtheissuanceofcapitalstock

ANS:BDIF:2OBJ:01

18.Thestatementofcashflowsmaybeusedbymanagementto

a.assesstheliquidityofthebusiness

b.assessthemajorpolicydecisionsinvolvinginvestmentsandfinancing

c.determinedividendpolicy

d.doalloftheabove

ANS:DDIF:1OBJ:01

19.Depreciationonfactoryequipmentwouldbereportedinthestatementofcashflows

preparedbytheindirectmethodin

a.thecashflowsfromfinancingactivitiessection

b.thecashflowsfrominvestingactivitiessection

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c.aseparateschedule

d.thecashflowsfromoperatingactivitiessection

ANS:DDIF:2OBJ:02

20.Whichofthefollowingshouldbeaddedtonetincomeincalculatingnetcashflowfrom

operatingactivitiesusingtheindirectmethod?

a.anincreaseininventory

b.adecreaseinaccountspayable

c.preferreddividendsdeclaredandpaid

d.adecreaseinaccountsreceivable

ANS:DDIF:2OBJ:02

21.Whichofthefollowingshouldbedeductedfromnetincomeincalculatingnetcashflow

fromoperatingactivitiesusingtheindirectmethod?

a.depreciationexpense

b.amortizationofpremiumonbondspayable

c.alossonthesaleofequipment

d.dividendsdeclaredandpaid

ANS:BDIF:2OBJ:02

22.Whichofthefollowingbelowincreasescash?

a.depreciationexpense

b.acquisitionoftreasurystock

c.borrowingmoneybyissuingasix-monthnote

d.thedeclarationofacashdividend

ANS:CDIF:2OBJ:02

23.Whichoneofthefollowingbelowwouldnotbeclassifiedasanoperatingactivity?

a.interestexpense

b.incometaxes

c.paymentofdividends

d.sellingexpenses

ANS:CDIF:2OBJ:02

24.Whichoneofthefollowingbelowshouldbeaddedtonetincomeincalculatingnetcash

flowfromoperatingactivitiesusingtheindirectmethod?

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a.againonthesaleofland

b.adecreaseinaccountspayable

c.anincreaseinaccruedliabilities

d.dividendspaidoncommonstock

ANS:CDIF:2OBJ:02

25.Onthestatementofcashflowspreparedbytheindirectmethod,a$50,000gainonthesale

ofinvestmentswouldbe

a.deductedfromnetincomeinconvertingthenetincomereportedontheincome

statementtocashflowsfromoperatingactivities

b.addedtonetincomeinconvertingthenetincomereportedontheincomestatement

tocashflowsfromoperatingactivities

c.addedtodividendsdeclaredinconvertingthedividendsdeclaredtothecashflows

fromfinancingactivitiesrelatedtodividends

d.deductedfromdividendsdeclaredinconvertingthedividendsdeclaredtothecash

flowsfromfinancingactivitiesrelatedtodividends

ANS:ADIF:2OBJ:02

26.Accountsreceivablearisingfromtradetransactionsamountedto$45,000and$52,000atthe

beginningandendoftheyear,respectively.Netincomereportedontheincomestatement

fortheyearwas$105,000.Exclusiveoftheeffectofotheradjustments,thecashflows

fromoperatingactivitiestobereportedonthestatementofcashflowspreparedbythe

indirectmethodis

a.$105,000

b.$112,000

c.$98,000

d.$140,000

ANS:CDIF:2OBJ:02

27.Thenetincomereportedontheincomestatementforthecurrentyearwas$275,000.

Depreciationrecordedonfixedassetsandamortizationofpatentsfortheyearwere$40,000

and$9,000,respectively.Balancesofcurrentassetandcurrentliabilityaccountsattheend

andatthebeginningoftheyearareasfollows:

EndBeginning

Cash$50,00()$60,000

Accountsreceivable112,000108,000

Inventories105,00093,000

Prepaidexpenses4,5006,500

Accountspayable(merchandisecreditors)75,00089,000

Whatistheamountofcashflowsfromoperatingactivitiesreportedonthestatementofcash

flowspreparedbytheindirectmethod?

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a.$198,000

b.$324,000

c.$352,000

d.$296,000

ANS:DDIF:3OBJ:02

28.Thefollowinginformationisavailablefromthecurrentperiodfinancialstatements:

Netincome.......................................$140,000

Depreciationexpense.....................28,000

Increaseinaccountsreceivable......16,000

Decreaseinaccountspayable.........21,000

Thenetcashflowfromoperatingactivitiesusingtheindirectmethodis

a.$131,000

b.$163,000

c.$107,000

d.$205,000

ANS:ADIF:3OBJ:02

29.Onthestatementofcashflows,thecashflowsfrominvestingactivitiessectionwould

include

a.receiptsfromtheissuanceofcapitalstock

b.paymentsfordividends

c.paymentsforretirementofbondspayable

d.receiptsfromthesaleofinvestments

ANS:DDIF:2OBJ:02

30.Abuildingwithabookvalueof$45,00()issoldfor$50,000cash.Usingtheindirect

method,thistransactionshouldbeshownonthestatementofcashflowsasfollows:

a.anincreaseof$45,000frominvestingactivities

b.anincreaseof$50,000frominvestingactivitiesandadeductionfromnetincome

of$5,000

c.anincreaseof$50,000frominvestingactivities

d.anincreaseof$45,000frominvestingactivitiesandanadditiontonetincomeof

$5,000

ANS:BDIF:2OBJ:02

31.Cashpaidforequipmentwouldbereportedinthestatementofcashflowsin

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a.thecashflowsfromoperatingactivitiessection

b.thecashflowsfromfinancingactivitiessection

c.thecashflowsfrominvestingactivitiessection

d.aseparateschedule

ANS:CDIF:2OBJ:02

32.Ifagainof$9,000isincurredinselling(forcash)officeequipmenthavingabookvalueof

$55,000,thetotalamountreportedinthecashflowsfrominvestingactivitiessectionofthe

statementofcashflowsis

a.$46,000

b.$9,000

c.$55,00()

d.$64,000

ANS:DDIF:2OBJ:02

33.Whichofthefollowingtypesoftransactionswouldbereportedasacashflowfrom

investingactivityonthestatementofcashflows?

a.issuanceofbondspayable

b.issuanceofcapitalstock

c.purchaseoftreasurystock

d.purchaseofnoncurrentassets

ANS:DDIF:2OBJ:02

34.Landcosting$47,000wassoldfor$78,000cash.Thegainonthesalewasreportedonthe

incomestatementasotherincome.Onthestatementofcashflows,whatamountshouldbe

reportedasaninvestingactivityfromthesaleofland?

a.$78,000

b.$47,000

c.$109,000

d.$31,000

ANS:ADIF:2OBJ:02

35.Equipmentwithanoriginalcostof$50,000andaccumulateddepreciationof$20,000was

soldatalossof$7,000.Asaresultofthistransaction,cashwould

a.increaseby$23,000

b.decreaseby$7,000

c.increaseby$43,000

d.decreaseby$30,000

ANS:ADIF:2