Cash Flow Statement Questions! Trivia Quiz

74 Questions | Total Attempts: 234

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Cash Flow Statement Questions! Trivia Quiz

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Questions and Answers
  • 1. 
    All of the following activities are reported on the statement of cash flows except:
    • A. 

      Marketing activities

    • B. 

      Investing activities

    • C. 

      Operating activities

    • D. 

      Financing activities

  • 2. 
    Activites that create long-term liabilites are usually
    • A. 

      Financing activities

    • B. 

      Operating activities

    • C. 

      Noncash investing and financing activities

    • D. 

      Investing activities

  • 3. 
    Activities affecting long-term assets are
    • A. 

      Financing activities

    • B. 

      Marketing activities

    • C. 

      Operating activities

    • D. 

      Investing activities

  • 4. 
    In 2010, PMW Corporation borrowed $110,000, paid dividends of $34,000, issued 10,000 shares of stock for $45 per share, purchased land for $240,000, and received dividends of $10,000. Net income was $150,000, and depreciation for the year totaled $8,000. How much should be reported as net cash provided by operating activites by the indirect method?
    • A. 

      $194,000

    • B. 

      $158,000

    • C. 

      $234,000

    • D. 

      $134,000

  • 5. 
    Activities that obtain the cash needed to launch and sustain a company are
    • A. 

      Marketing activities

    • B. 

      Income activities

    • C. 

      Investing activities

    • D. 

      Financing activities

  • 6. 
    The exchange of stock for land would be reported as
    • A. 

      Exchanges are not reported on the statement of cash flow

    • B. 

      Financing activities

    • C. 

      Noncash investing and financing activities

    • D. 

      Investing activities

  • 7. 
    Net Income: $50,000                                                        Increase in Accounts Payable: $9,000 Depreciation Expense:$10,000                                     Acquisition of Equipment: $35,000 Payment of Dividends: $1,000                                       Sales of Treasury Stock: $4,000 Increase in Accounts Receivable: $8,000                   Payment of Long-Term Debt: $16,000 Collections of Long-Term Notes Receivable:$5,000Proceeds from Sale of Land: $40,000 Loss on Sale of Land: $15,000                                      Decrease in Inventories: $3,000 Under the direct method, net cash provided by operating activites would be
    • A. 

      $84,000

    • B. 

      $76,000

    • C. 

      $79,000

    • D. 

      $89,000

  • 8. 
    Net Income: $50,000                                                        Increase in Accounts Payable: $9,000 Depreciation Expense:$10,000                                     Acquisition of Equipment: $35,000 Payment of Dividends: $1,000                                       Sales of Treasury Stock: $4,000 Increase in Accounts Receivable: $8,000                   Payment of Long-Term Debt: $16,000 Collections of Long-Term Notes Receivable:$5,000Proceeds from Sale of Land: $40,000 Loss on Sale of Land: $15,000                                      Decrease in Inventories: $3,000 Net cash provided by (used for) investing activites would be
    • A. 

      $20,000

    • B. 

      $10,000

    • C. 

      $(15,000)

    • D. 

      $ (10,000)

  • 9. 
    Net Income: $50,000                                                        Increase in Accounts Payable: $9,000 Depreciation Expense:$10,000                                     Acquisition of Equipment: $35,000 Payment of Dividends: $1,000                                       Sales of Treasury Stock: $4,000 Increase in Accounts Receivable: $8,000                   Payment of Long-Term Debt: $16,000 Collections of Long-Term Notes Receivable:$5,000Proceeds from Sale of Land: $40,000 Loss on Sale of Land: $15,000                                      Decrease in Inventories: $3,000 Net cash provided by (used for) financing activities would be
    • A. 

      $3,000

    • B. 

      $ (13,000)

    • C. 

      $ (21,000)

    • D. 

      $1,000

  • 10. 
    Net Income: $50,000                                                        Increase in Accounts Payable: $9,000 Depreciation Expense:$10,000                                     Acquisition of Equipment: $35,000 Payment of Dividends: $1,000                                       Sales of Treasury Stock: $4,000 Increase in Accounts Receivable: $8,000                   Payment of Long-Term Debt: $16,000 Collections of Long-Term Notes Receivable:$5,000Proceeds from Sale of Land: $40,000 Loss on Sale of Land: $15,000                                      Decrease in Inventories: $3,000 The cost of land must have been
    • A. 

      $40,000

    • B. 

      $55,000

    • C. 

      $25,000

    • D. 

      Cannot be determined for the data given

  • 11. 
    Sweet Treat Ice Cream began the year with $60,000 in accounts receivable and ended the year with $50,000 in accounts receivable. If credit sales for the year were $700,000, the cash collected from customers during the year amounted to
    • A. 

      $690,000

    • B. 

      $760,000

    • C. 

      $750,000

    • D. 

      $710,000

  • 12. 
    Nasau Farms, Ltd., made sales of $750,000 and has cost of goods sold of $410,000. Inventory decreased by $10,000 and accounts payable decreased by $12,000. Operating expenses were $180,000. How much was Nassau Farm's net income for the year?
    • A. 

      $150,000

    • B. 

      $160,000

    • C. 

      $148,000

    • D. 

      $340,000

  • 13. 
    Nasau Farms, Ltd., made sales of $750,000 and has cost of goods sold of $410,000. Inventory decreased by $10,000 and accounts payable decreased by $12,000. Operating expenses were $180,000. How much cash did Nassau Farms pay for inventory during the year?
    • A. 

      $410,000

    • B. 

      $400,000

    • C. 

      $422,000

    • D. 

      $412,000

  • 14. 
    Bartman, Inc. purchased a tract of land, a small office building, and some equipment for $1,900,000. The appraised value of the land was $1,380,000, the building $575,000, and the equipment $345,000. What is the cost of the land?
    • A. 

      $633,333

    • B. 

      $1,140,000

    • C. 

      $1,380,000

    • D. 

      None of the above

  • 15. 
    Which statement is false?
    • A. 

      Depreciation is a process of allocating the cost of a plant asset over its useful life.

    • B. 

      Depreciation is based on the matching principle because it matches the cost of the asset with the revenue generated over the asset's useful life.

    • C. 

      The cost of a plant asset minus accumulated depreciation equals the asset's book value.

    • D. 

      Depreciation creates a fund to replace the asset at the end of its useful life.

  • 16. 
    On July 1, 2010, Horizon Communications purchased a new piece of equipment that cost $45,000. The estimated useful life is 10 years and estimated residual value is $5,000. What is the depreciation expense for 2010 fif Horizon uses the straight-line method?
    • A. 

      $4,000

    • B. 

      $2,000

    • C. 

      $4,500

    • D. 

      $2,250

  • 17. 
    On July 1, 2010, Horizon Communications purchased a new piece of equipment that cost $45,000. The estimated useful life is 10 years and estimated residual value is $5,000. Assume Horizon Communications purchased the equipment on January 1, 2010. If Horizon uses the straight-line method for depreciation, what is the asset's book value at the end of 2011?
    • A. 

      $42,000

    • B. 

      $36,000

    • C. 

      $32,000

    • D. 

      $37,000

  • 18. 
    On July 1, 2010, Horizon Communications purchased a new piece of equipment that cost $45,000. The estimated useful life is 10 years and estimated residual value is $5,000. Assume Horizon Communications purchased the equipment on January 1, 2010. If Horizon uses the double-declining-balance method, what is the depreciation for 2011?
    • A. 

      $9,000

    • B. 

      $6,400

    • C. 

      $16,200

    • D. 

      $7,200

  • 19. 
    On July 1, 2010, Horizon Communications purchased a new piece of equipment that cost $45,000. The estimated useful life is 10 years and estimated residual value is $5,000. Return to Horizon's original purchase date of July 1 ,2010. Assume that Horizon uses the straight-line method of depreciation and sells the equipment for $36,500 on July 1, 2014. The result of the sale of the equipment is a gain (loss) of
    • A. 

      ($3,500)

    • B. 

      $7,500

    • C. 

      $2,500

    • D. 

      $0

  • 20. 
    A company bought a new machine for $24,000 on January 1. The machine is expected to last five years and have a residual value of $4,000. If the company uses  the double-declining-balance method, accumulated depreciation at the end of year 2 will be:
    • A. 

      $12,800

    • B. 

      $15,360

    • C. 

      $19,200

    • D. 

      $16,000

  • 21. 
    Which of the following is not a capital expenditure?
    • A. 

      The addition of a building wing

    • B. 

      A tune-up of a company vehicle

    • C. 

      A complete overhaul of an air-conditioner system

    • D. 

      Replacement of an old motor with a new one in a piece of equipment

    • E. 

      The cost of installing a piece of equipment

  • 22. 
    Which of the following assets is not subject to a decreasing book value through depreciation, depletion, or amortization?
    • A. 

      Land Improvements

    • B. 

      Goodwill

    • C. 

      Intangibles

    • D. 

      Natural Resources

  • 23. 
    Why would a business select an accelerated method of depreciation for tax purposes?
    • A. 

      MACRS depreciation follows a specific pattern of depreciation.

    • B. 

      Accelerated depreciation generates higher depreciation expense immediately, and therefore lowers tax payments in the early years of the assets life.

    • C. 

      Accelerated depreciation is easier to calculate because salvage value is ignored.

    • D. 

      Accelerated depreciation generates a greater amount of depreciation over the life of the asset than does straight-line depreciation.

  • 24. 
    A company purchased an oil well for $270,000. It estimates that the well contains 90,000 barrels, has an eight-year life, and no salvage value. If the company extracts and sells 10,000 barrels of oil in the first year, how much depletion expense should be recorded?
    • A. 

      $33,750

    • B. 

      $135,000

    • C. 

      $27,000

    • D. 

      30,000

  • 25. 
    Which item among the following is not an intangible asset?
    • A. 

      A copyright

    • B. 

      A patent

    • C. 

      A trademark

    • D. 

      Goodwill

    • E. 

      All of the above are intangible assets

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