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Exam 16: The Cash Flow Statement

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Question 1

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For anything to be considered a cash equivalent,the asset must be:

A) convertible to cash within six months or less.
B) convertible to cash within one year.
C) convertible to cash within five years.
D) convertible to cash at will.

E) None of the above
F) A) and B)

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Question 2

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Selling property,plant and equipment would be considered a cash inflow from investing.

A) True
B) False

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Question 3

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Qtopia Company uses the direct method to prepare its cash flow statement.It has reported operating expenses of $21 000 on its income statement for the year 2016.If the balance in accrued liabilities has gone up by $1 000 during the year,then $1 000 will have to be added to $21 000 as part of the process to calculate payments to suppliers for operating expenses.

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

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

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

Thomas Ltd uses the direct method to prepare its cash flow statement.Refer to the following information reported for the year 2016: Sales revenue,$41,000 Interest revenue,$700 Accounts receivable,beginning balance,$13,500 Accounts receivable,ending balance,$26,000 There were no amounts reported for Interest receivable. In the operating activities section of the cash flow statement,what amount will be shown for total cash receipts?

Avatar Company uses the indirect method to prepare its cash flow statement.Refer to the following information for the year 2016: Net cash provided by operating activities: $110,000 Net cash used in investing activities: $(116,500) Net cash provided by financing activities: $19,000 If the cash balance at the beginning of the year was $13,300,what would be the ending cash balance?

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

Qtopia Company uses the direct method to prepare its cash flow statement.It has reported sales revenue of $100 000 on its income statement for the year 2016.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.

Which of the following statements about the cash flow statement is TRUE?

Avatar Company uses the direct method to prepare its cash flow statement.Please refer to the following information: • Repayments on long-term bills payable: $40 000 • New borrowing on long-term bills payable: $34 000 Which of the following statements is accurate regarding the cash flow statement?

Buying property,plant and equipment would be considered a cash outflow from financing.

In creating a cash flow statement using the indirect method,we consider that a decrease in current liabilities causes an increase in cash.

The financing activities section of the cash flow statement includes paying dividends and paying off loans.

Which of the following are the three major categories included on the cash flow statement?

How would a new issue of ordinary shares be shown on 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 describes the investing activities as shown in the cash flow statement?

A cash flow statement is generated to show: