FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 16: The Cash Flow Statement

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following is NOT a true statement about the cash flow statement?

A) It shows where cash came from and how it was spent.
B) It shows how the profits or losses of the company were generated.
C) It reports why cash increased or decreased.
D) It covers a specific span of time, the same as the income statement.

E) C) and D)
F) None of the above

Correct Answer

verified

Show Answer

Question 22

True/False

Review LaterAdd Note

Review Later

Investors and management use the cash flow statement to evaluate a firm's profitability.

A) True
B) False

Correct Answer

verified

Show Answer

Question 23

Multiple Choice

Review LaterAdd Note

Which of the following describes the operating activities as shown in the cash flow statement?

Which of the following transactions would be shown in the non- cash investing and financing activities section of the cash flow statement?

Which of the following would be considered an operating activity on the cash flow statement?

Sonesta Company owed one of its creditors $250 000, but did not have enough cash to repay the debt. Following lengthy negotiations, the parties agreed that Sonesta would issue 100 000 ordinary shares to settle the debt. How would this transaction be shown on the cash flow statement?

Which of the following sections from the cash flow statement would include the purchase of a building totally financed by a mortgage?

Arturo Sales purchased some equipment for $12 000 by issuing a 6- month bill payable. How would this transaction be shown on the cash flow statement?

Investing activities include activities that affect the non- current asset section of the balance sheet.

The investing activities section of the cash flow statement reflects the cash flows that increase or decrease non- current assets.

Interest expense incurred on a bill payable would be included in the financing section of the cash flow statement.

The cash flow statement explains the difference between profit and the change in cash balance.

Cash equivalents are assets that can be converted to cash within one year.

Free cash flow is equal to the cash flow from operating activities less cash payments:

Which of the following sections from the cash flow statement would include the acquisition of a building by issuing ordinary shares?

For purposes of the cash flow statement, cash includes cash on hand, cash in the bank and cash equivalents.

Which of the following transactions would be shown in the non- cash investing and financing activities section of the cash flow statement?

Qtopia Company uses the direct method to prepare its cash flow statement. It has reported sales revenues of $100 000 on its income statement for the year 2014. If the balance in accounts receivable has gone up by $4 000 during the year, then $4 000 will have to be added to $100 000 to calculate collections from customers.

In creating a cash flow statement using the indirect method, a gain on the sale of non- current assets must be shown as an addition to Profit in the operating activities section.

In creating a cash flow statement using the indirect method, depreciation expense is added back as an adjustment to profit under operating activities.