財務報表分析（英文版·第11版）測試題TestBank Chap007 Cash Flow Analysis

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Chapter07

CashFlowAnalysis

MultipleChoiceQuestions

1.

Undertheaccrualbasisofaccounting,whichofthefollowingstatementsistrue?

I.Reportednetincomeprovidesameasureofoperatingperformance.

II.Revenueisrecognizedwhencashisreceived,andexpensesarerecognizedwhenpaymentismade.

III.Cashinflowsarerecognizedwhentheyarereceived,andcashoutflowsarerecognizedwhentheyaremade.

A.

Ionly

B.

IIIonly

C.

IandIII

D.

I,II,andIII

2.

Whichofthefollowingwouldrequireanadjustmentinthecomputationofcashflowfromoperationsusingtheindirectmethod?

I.Saleofmachineryfor$50,000withanetbookvalueof$35,000

II.Purchaseofsuppliesforcash

III.Remittancebycustomerinpaymentofgoodspurchasedthisaccountingperiod

IV.Acquisitionoflandwithsimultaneousissuanceoflong-termnote

A.

I

B.

IandII

C.

IandIII

D.

IV

3.

Whichofthefollowingwouldrequireanadjustmentinthecomputationofcashflowfromoperationsusingtheindirectmethod?

I.Depreciationexpense

II.Lossonsaleofasset

III.Saleofservicestocustomersforcash

IV.Utilitybillreceivedandpaidincash

A.

I

B.

IandII

C.

IandIII

D.

IV

4.

Beginningandendingaccountsreceivableare$76,000and$42,000,respectively.Salesfortheperiodtotal$384,000,ofwhich$40,000wasdirectlyforcash.Howmuchcashwascollectedfrommakingsalesandcollectingaccountsreceivable?

A.

$344,000

B.

$418,000

C.

$378,000

D.

$376,000

5.

Beginningaccountsreceivableare$76,000.Salesfortheperiodtotal$384,000,ofwhich$40,000wasdirectlyforcash.$418,000wascollectedfrommakingsalesandcollectingaccountsreceivable.Whatistheendingbalanceforaccountsreceivable?

A.

$42,000

B.

$62,000

C.

$82,000

D.

$68,000

6.

Afirmhasnetsalesof$6,000,cashexpenses(includingtaxes)of$2,800,anddepreciationof$1,000.Ifaccountsreceivableincreasedintheperiodby$800,cashflowsfromoperationsequal:

A.

$2,400.

B.

$3,200.

C.

$3,400.

D.

$4,200.

7.

Whichofthefollowingrepresentsaninvestingactivityinthestatementofcashflows?

A.

Depreciationofplantassets

B.

Saleofplantassetsataloss

C.

Stockdividend

D.

Purchaseofinventory

8.

Whichofthefollowingisnotafinancingactivityinthestatementofcashflows?

A.

Cashdividend

B.

Repurchaseofcommonstock

C.

Paymentofinterestondebt

D.

Issuanceofnewdebt

ThefollowinginformationshouldbeusedtoaccordingtotheprovisionsofGAAP(StatementofCashflows)andusingthefollowingdata.

9.

Whatisnetcashflowfromoperations?

A.

$58,000

B.

$55,000

C.

$54,000

D.

$48,000

10.

Whatisnetcashflowfrominvesting?

A.

$10,000

B.

$5,000

C.

($5,000)

D.

($15,000)

11.

Whatisnetcashflowfromfinancing?

A.

$6,000

B.

$3,000

C.

($14,000)

D.

($17,000)

12.

Whatischangeincash?

A.

$49,000

B.

$46,000

C.

$45,000

D.

$39,000

13.

Onastatementofcashflowsthatusestheindirectapproach,calculationofcashflowfromoperationstreatsdepreciationasanadjustmenttoreportednetincomebecause:

A.

depreciationisadirectsourceofcash.

B.

depreciationisanoutflowofcashtoareserveaccountforthereplacementofassets.

C.

depreciationreducesnetincomeandinvolvesanoutflowofcash.

D.

depreciationreducesnetincomebutdoesnotinvolveanoutflowofcash.

14.

Whichofthefollowingstatementsarecorrect?

I.Acompany'schoiceofaccountingprinciplesforfinancialreportingpurposesaffectsnetcashflowfortheaccountingperiod.

II.Acompany'schoiceofaccountingprinciplesforfinancialreportingpurposesdoesnotaffectoperatingcashflow.

III.Ifacompanysellsitsreceivables,thiswillincreaseoperatingcashflow.

IV.Ifacompanysellsitsreceivables,thiswillincreasefinancingcashflow.

A.

IandIII

B.

I,II,andIII

C.

IIandIV

D.

IandIV

15.

Anincreaseinaccountspayablewouldbeconsidered:

A.

asourceofcash.

B.

auseofcash.

C.

anadjustingentry.

D.

anoncashchargetoincome.

HuptaCorporationreportsfortheyearendedDecember31,2005,salesof$9,430andcostofgoodssoldof$6,500.OtherinformationasofDecember31isasfollows:

16.

CashpaidtosuppliersforyearendedDecember31,2005,is:

A.

$6,480.

B.

$6,440.

C.

$5,520.

D.

$6,560.

17.

CashcollectedfromcustomersfortheyearendedDecember31,2005,is:

A.

$9,480.

B.

$9,430.

C.

$8,930.

D.

$8,980.

Belowisanexampleofanincorrectlypreparedstatementofcashflows.Thedescriptionsofactivitiesarecorrect.

18.

Thecorrectcashflowsfromoperatingactivitiesis:

A.

$65,500.

B.

$63,500.

C.

$53,500.

D.

Noneoftheabove

19.

Thecorrectcashflowsfrominvestingactivitiesis:

A.

($41,000).

B.

($45,500).

C.

($48,000).

D.

Noneoftheabove

20.

Thecorrectcashflowsfromfinancingactivitiesis:

A.

($4,500).

B.

$3,000.

C.

$1,000.

D.

Noneoftheabove

21.

Thecorrectchangeincashfortheyearis:

A.

$4,000

B.

$15,000

C.

$16,500

D.

Noneoftheabove

22.

Themanagementofacompanywishestowindow-dressitscashflowfromoperations.Whichofthefollowingwillimprovecashflowfromoperations?

I.Factoringaccountsreceivable

II.Payingsuppliersmorequickly

III.Sellingofsomeexcessmarketablesecurities

IV.Deferringpaymentoftaxes

A.

IVonly

B.

IIIandIV

C.

II,III,andIV

D.

IandIV

TracyCompanyreportsthefollowinginitsstatementofcashflows:

23.

IfTracyshowscostofgoodssoldof$2,050onitsincomestatement,cashpaidtosuppliersis:

A.

$1,550.

B.

$1,950.

C.

$2,150.

D.

$2,650.

24.

IfTracyshowsdepreciationexpenseof$275initsincomestatement,cashpaidforamortizationis:

A.

$0

B.

$75

C.

$525

D.

notdeterminable

25.

Tracyusedtheindirectmethodofdeterminingcashflowfromoperations(CFO).Ifithadusedthedirectmethod:

A.

CFOwouldhavebeenhigherasgainsarenotdeductedinarrivingatCFO.

B.

CFOwouldhavebeenloweraslossesanddepreciationarenotaddedbackinarrivingatCFO.

C.

CFOwouldhavebeenthesame.

D.

itisnotpossibletodeterminewhatCFOwouldhavebeenwithoutmoreinformation.

26.

Whichofthefollowingitemsisdeductedfromnetincometoarriveatcashflowfromoperationswhenusingtheindirectmethod?

A.

Depreciationexpense

B.

Amortizationexpense

C.

Decreaseinaccountsreceivable

D.

Decreaseinaccountspayable

27.

Firmsreportpaymentsforcapitalleasesinthecashflowstatement:

A.

onlyasfinancingcashflows.

B.

onlyasinvestingcashflows.

C.

partlyasoperatingcashflowsandpartlyasinvestingcashflows.

D.

partlyasoperatingcashflowsandpartlyasfinancingcashflows.

28.

Comparedwithfirmswithcapitalleases,firmswithoperatingleasesgenerallyreport:

A.

highercashflowfromoperations.

B.

lowercashflowfromoperations.

C.

identicalcashflowfromoperations.

D.

lowerorhighercashflowfromoperationsdependinguponmarketinterestrates.

29.

Whichofthefollowingwouldaffectcashflowfromoperations?

A.

Saleoflandforagain

B.

Paymentofdividends

C.

Depreciationoffixedassets

D.

Capitalizingcoststhatwerepreviouslyexpensed

30.

Whichofthefollowingistrueofdepreciation?

A.

Itisrecordedsothatnetbookvaluerepresentsfairvalueofassets.

B.

Itdoesnotaffecttheamountofcashrealizedfromoperationsasitisanoncashflow.

C.

Itisaddedbacktonetincometocalculatecashfromoperationsunderthedirectmethod.

D.

Itrepresentsafundfromwhichtopurchasefutureassets.

ThefollowinginformationshouldbeusedaccordingtotheprovisionsofGAAP(StatementofCashflows)andusingthefollowingdata.

31.

Whatisnetcashflowfromoperations?

A.

$74,000

B.

$75,000

C.

$83,000

D.

$85,000

32.

Whatisnetcashflowfrominvesting?

A.

$11,000

B.

$7,000

C.

($2,000)

D.

($12,000)

33.

Whatisnetcashflowfromfinancing?

A.

($5,000)

B.

($10,000)

C.

($11,000)

D.

($13,000)

34.

Whatischangeincash?

A.

$81,000

B.

$72,000

C.

$71,000

D.

$62,000

35.

Whichofthefollowingistrue?ThechoiceofLIFOversusFIFOwill:

A.

notaffectnetincomeorcashflowfromoperations.

B.

notaffectnetincomebutwillaffectcashflowfromoperations.

C.

affectbothnetincomeandcashflowfromoperations.

D.

affectnetincomebutwillnotaffectcashflowfromoperations.

36.

Whichofthefollowingwouldbeconsideredauseofcash?

A.

Depreciation

B.

Anincreaseinworkingcapital

C.

Saleofbonds

D.

Anincreaseinwagespayable

SchwerinCorporationreportsthefollowingonits2005financialstatements.

37.

Thenetbookvalueofequipmentsoldwas:

A.

$120million

B.

$100million

C.

$80million

D.

$60million

38.

Ifthebeginningandendingproperty,plant,andequipmentare$500millionand$550millionrespectively,thegrossbookvalueofequipmentsoldwas:

A.

$120million

B.

$100million

C.

$80million

D.

$60million

39.

Beginningandendingplantassetsare$325,000and$370,000respectively.Beginningandendingaccumulateddepreciationare$82,800and$95,000respectively.Depreciationexpensefortheperiodwas$30,000,andnewassetsof$76,000werepurchased.Plantassetsweresoldata$10,500loss.Whatwerethecashproceedsfromthesale?

A.

$17,800

B.

$3,100

C.

$2,700

D.

$31,000

ThefollowinginformationisgivenforBuildingInc.:

During2005newassetswerepurchasedforof$78,000,andplantassetsweresoldata$10,000loss.

40.

Whatwasthebookvalueofthesoldassets?

A.

$38,000

B.

$18,000

C.

$10,000

D.

$8,000

41.

Whatwerethecashproceedsfromthesale?

A.

$38,000

B.

$18,000

C.

$10,000

D.

$8,000

42.

Beginningandendingprepaidinsuranceis$36,000and$26,500respectively.Duringtheperiod,$30,500ofinsuranceexpensewasrecorded.Howmuchnewinsurancewaspurchased?

A.

$2,500

B.

$15,600

C.

$49,000

D.

$21,000

43.

Thebalanceforsuppliesis$41,000and$27,000for12/31/05and12/31/06,respectively.Duringthe2006,thecompanyrecorded$30,500ofsuppliesexpensewasrecorded.Howmuchnewsupplieswerepurchased?

A.

$44,500

B.

$16,500

C.

$14,000

D.

$30,500

44.

Thecashflowadequacyratio:

A.

measuresacompany'sabilitytogeneratesufficientcashflowfrominvestingtocoverdebtrepayments.

B.

measuresacompany'sabilitytogeneratesufficientcashflowsfromoperationstocovercapitalexpendituresanddebtrepayment.

C.

measuresacompany'sabilitytogeneratesufficientcashflowsfromoperationstocovercapitalexpenditures,inventoryadditions,andcashdividends.

D.

measuresacompany'sabilitytogeneratesufficientcashflowsfromoperationstocovercapitalexpenditures,debtrepayment,anddividends.

45.

Acashflowadequacyratio,whenmeasuredoverthelastseveralyears,oflessthanone:

A.

indicatesthatacompany'snetincomeistoolowrelativetoitssaleslevel.

B.

indicatesthatacompanyshoulddecreaseitsdividendpayoutratio.

C.

indicatesthatacompanyneedstopaydownitsdebttodecreaseinterestcosts.

D.

indicatesthatacompany'sinternallygeneratedcashflowshavenotbeensufficienttocoverdividendpaymentsandsupportcurrentoperatinggrowthlevels.

True/FalseQuestions

46.

Companiescanconstructthestatementofcashflowsusingeitherthedirectmethodortheindirectmethod.

True

False

47.

Cashflowfromoperationsisusuallylessvolatilethannetincome.

True

False

48.

Theonlytimeacompanyexperiencesanegativecashflowfromoperationsiswhentheyareintrouble.

True

False

49.

Cashflowfromoperationswilloftenbenegativeforcompaniesexperiencingtremendousgrowth.

True

False

50.

Cashflowfrominvestingwhenaveragedoveranextendedperiodoftimewouldnormallybeexpectedtobenegative(i.e.netoutflow).

True

False

51.

Cashflowfromfinancingisnormallynegativeduringthestart-upphaseforacompany.

True

False

52.

Overanextendedperiodoftimeaveragecashflowfromoperationswouldbeexpectedtobehigherthanaveragenetincome.

True

False

53.

Amortizationofgoodwillreducesnetincomeandisacashoutflow.

True

False

54.

Paymentofa5%stockdividendwillnotappearinthestatementofcashflows.

True

False

55.

Againonsaleofanassetwouldrequireadjustingnetincome,ifpreparingthestatementofcashflowsusingtheindirectmethod.

True

False

56.

Anincreaseinaccountsreceivabledoesnotrequireadjustingnetincome,ifpreparingthestatementofcashflowsusingtheindirectmethod.

True

False

57.

Depreciationandamortizationexpenseneedstobeaddedbacktonetincomeifpreparingthestatementofcashflowsusingtheindirectmethod.

True

False

58.

Anincreaseinassetswouldusuallyshowasanoutflowinthestatementofcashflows.

True

False

59.

Adecreaseinliabilitieswouldusuallyshowasanoutflowinthestatementofcashflows.

True

False

60.

Practicerequiresseparatedisclosureofcashflowsinthestatementofcashflows.

True

False

61.

Manyfinancialanalystssubtractinterestpaidfromcashfromoperationsandreclassifyitaspartofcashfromfinancingactivities.

True

False

62.

Thefinancingsectionofthestatementofcashflows(preparedinaccordancewithGAAP)containsallcashinflowsandcashoutflows,relatingtothefinancingofacompany.

True

False

63.

Depreciationexpensedecreasesnetincome,butisnotauseofcash.

True

False

64.

Cashflowsfromoperationsisbettermeasureofprofitabilitythannetincomeasitislesssusceptibletomanipulationbymanagement.

True

False

65.

Userssometimescomputenetincomeplusdepreciationandamortization(forexampleEBITDA)asacrudeproxyforoperatingcashflows.

True

False

66.

Increasesinworkingcapitalareasourceoffunds.

True

False

67.

Taxespaidoncapitalgainsfromthesaleofmarketablesecuritiesarerecordedascashoutflowsfromoperations.

True

False

68.

Netcashflowisnotaffectedbyacompany'schoiceofaccountingprinciplesforfinancialreportingpurposes.

True

False

69.

Infirmsthatareexperiencingtremendousgrowth,itisrarethatnetincomewillexceedcashgeneratedbyallactivities.

True

False

70.

Interestincomeisrecordedasanoperatinginflowofcash.

True

False

71.

Anincreaseinaliabilityisauseofcash.

True

False

72.

Thecashadequacyratioisnormallymeasuredoveranextendedperiodoftimetoremovetheeffectofrandomdisturbances.

True

False

73.

Thecashreinvestmentratioisameasureofthepercentageofinvestmentinassetsrepresentingoperatingcashretainedandreinvestedinthecompanyforbothreplacingassetsandgrowthinoperations.

True

False

EssayQuestions

74.

CashFlowfromOperations

a.Isitpossibletohaveapositivenetincomeandnegativecashflowfromoperations?Ifyouranswerisno,explainfully.Ifyouranswerisyes,providetwoexampleswhenonemightfindthis.

b.Isitpossibletohaveanegativenetincomeandpositivecashflowfromoperations?Ifyouranswerisno,explainfully.Ifyouranswerisyes,providetwoexampleswhenonemightfindthis.

75.

PreparationofStatementofCashFlows

ThefollowingcashflowdataofSignetSalesfortheyearendedDecember31,2005areasfollows:

a.PrepareastatementofcashflowsforSignetSalesinaccordanceusingthedirectmethod.

b.Discuss,fromananalyst'sviewpoint,thepurposeofclassifyingcashflowsintothecategoriesrequiredbyGAAP

76.

PreparationofStatementofCashFlows

UsethefollowingselecteddataaboutTilesLtd.andpreparetheoperatingactivitiessectionofastatementofcashflowsforthecompanyfor2005usingtheindirectmethod.

77.

PreparationofStatementofCashFlows

BelowistheincomestatementandbalancesheetofCloselyHeldCorporation.FromthisinformationprepareastatementofcashflowsfortheyearendedSeptember30,2005.

78.

BorrowingNeedsandPreparationofStatementofCashFlows

Youaretryingtodeterminehowmuchmoneyyourcompany,XYZCorporation,willneedtoborrowfromthebank,ifany.Youareinthemiddleofpreparingtheproformafinancialstatementsfor2005.Onthenextpagesisthecompletedincomestatementandpartiallycompletedbalancesheetforyourcompanyfor2005.

a.Usingtheinformationprovidedbelowcompletethebalancesheetfor2005.(Putyouranswersintheblankspacesonthebalancesheet.)

?Inventoryturnover(usingend-of-yearinventory)is4.

?Yoursilentpartnersdemandthat50%ofnetincomeispaidoutindividends.

?Youwillborrowifyouhaveacashshortage,andwillreducelong-termdebtifthereisanexcessofcash

b.Whenyouhavecompletedparta,prepareastatementofcashflows.

79.

IdentifyingCashFlowsbyActivity

Identifywhethereachofthefollowingisanoperating,investing,orfinancingcashoutfloworinfloworifitisanoncashflow,underGAAP.

Purchasemarketableequitysecurities

Dividendsonmarketableequitysecurities

Wagestoemployees

Depreciation

Issuanceofnewstock

Interestpaid

Goodwillamortization

Acquisitionofcompanyusingpurchaseaccounting

Saleofland

Taxpaidonsaleofland

Cashpaidbycustomers

80.

PreparationofStatementofCashFlows

BelowarethebalancesheetandincomestatementforAndersonCorporation.

AdditionalInformation

1.InYear1,Andersonsoldmachineryboughtat$36,for$18,resultingina$2gainonincomestatement.

2.$810individendswerepaidinYear1.

3.SG&Aexpenseincludes$50ofinterestexpense,andamortizationexpenseof$30.

4.Costofgoodsoldincludesdepreciationof$260.

5.Incometaxexpenseincludesdeferredtaxliabilityof$20.

a.Preparecashflowsfromoperationsusingthedirectmethod.

b.PreparestatementofcashflowsfromoperationsusingtheIndirectmethod.

81.

LimitationsoftheStatementofCashFlows

GAAPrequiresthattheStatementofCashflows(SCFs)ispreparedinaspecificmanner.Forthefollowingitems,discussinwhichsection(operating,investing,orfinancing)oftheSCFstheyarefound,wheretheymightmoreappropriatelybeplacedandwhy?

a.Dividendsreceived

b.Interestpaid

c.Incometaxes

82.

PreparationofStatementofCashFlowComponents

JEMCompany'scomparativebalancesheetsfor2004and2005appearbelow.

Thefollowingadditionalinformationisavailable:netincomefortheyear2005(asreportedontheincomestatement)was$50,000;dividendsof$40,000weredeclaredandpaid;andequipmentthatcost$8,000andhadabookvalueof$1,000wassoldduringtheyearfor$2,500.

Basedontheinformationprovided,answerthefollowing:

a.Whatwascashprovidedbyoperations?

b.Whatwascashprovidedbyinvestingactivity?

c.Howmuchwascashprovidedbyfinancingactivity?

d.Whatisthetotalchangeincashfor2005?

Chapter07CashFlowAnalysisAnswerKey

MultipleChoiceQuestions

1.

Undertheaccrualbasisofaccounting,whichofthefollowingstatementsistrue?

I.Reportednetincomeprovidesameasureofoperatingperformance.

II.Revenueisrecognizedwhencashisreceived,andexpensesarerecognizedwhenpaymentismade.

III.Cashinflowsarerecognizedwhentheyarereceived,andcashoutflowsarerecognizedwhentheyaremade.

A.

Ionly

B.

IIIonly

C.

IandIII

D.

I,II,andIII

2.

Whichofthefollowingwouldrequireanadjustmentinthecomputationofcashflowfromoperationsusingtheindirectmethod?

I.Saleofmachineryfor$50,000withanetbookvalueof$35,000

II.Purchaseofsuppliesforcash

III.Remittancebycustomerinpaymentofgoodspurchasedthisaccountingperiod

IV.Acquisitionoflandwithsimultaneousissuanceoflong-termnote

A.

I

B.

IandII

C.

IandIII

D.

IV

3.

Whichofthefollowingwouldrequireanadjustmentinthecomputationofcashflowfromoperationsusingtheindirectmethod?

I.Depreciationexpense

II.Lossonsaleofasset

III.Saleofservicestocustomersforcash

IV.Utilitybillreceivedandpaidincash

A.

I

B.

IandII

C.

IandIII

D.

IV

4.

Beginningandendingaccountsreceivableare$76,000and$42,000,respectively.Salesfortheperiodtotal$384,000,ofwhich$40,000wasdirectlyforcash.Howmuchcashwascollectedfrommakingsalesandcollectingaccountsreceivable?

A.

$344,000

B.

$418,000

C.

$378,000

D.

$376,000

5.

Beginningaccountsreceivableare$76,000.Salesfortheperiodtotal$384,000,ofwhich$40,000wasdirectlyforcash.$418,000wascollectedfrommakingsalesandcollectingaccountsreceivable.Whatistheendingbalanceforaccountsreceivable?

A.

$42,000

B.

$62,000

C.

$82,000

D.

$68,000

6.

Afirmhasnetsalesof$6,000,cashexpenses(includingtaxes)of$2,800,anddepreciationof$1,000.Ifaccountsreceivableincreasedintheperiodby$800,cashflowsfromoperationsequal:

A.

$2,400.

B.

$3,200.

C.

$3,400.

D.

$4,200.

7.

Whichofthefollowingrepresentsaninvestingactivityinthestatementofcashflows?

A.

Depreciationofplantassets

B.

Saleofplantassetsataloss

C.

Stockdividend

D.

Purchaseofinventory

8.

Whichofthefollowingisnotafinancingactivityinthestatementofcashflows?

A.

Cashdividend

B.

Repurchaseofcommonstock

C.

Paymentofinterestondebt

D.

Issuanceofnewdebt

ThefollowinginformationshouldbeusedtoaccordingtotheprovisionsofGAAP(StatementofCashflows)andusingthefollowingdata.

9.

Whatisnetcashflowfromoperations?

A.

$58,000

B.

$55,000

C.

$54,000

D.

$48,000

10.

Whatisnetcashflowfrominvesting?

A.

$10,000

B.

$5,000

C.

($5,000)

D.

($15,000)

11.

Whatisnetcashflowfromfinancing?

A.

$6,000

B.

$3,000

C.

($14,000)

D.

($17,000)

12.

Whatischangeincash?

A.

$49,000

B.

$46,000

C.

$45,000

D.

$39,000

13.

Onastatementofcashflowsthatusestheindirectapproach,calculationofcashflowfromoperationstreatsdepreciationasanadjustmenttoreportednetincomebecause:

A.

depreciationisadirectsourceofcash.

B.

depreciationisanoutflowofcashtoareserveaccountforthereplacementofassets.

C.

depreciationreducesnetincomeandinvolvesanoutflowofcash.

D.

depreciationreducesnetincomebutdoesnotinvolveanoutflowofcash.

14.

Whichofthefollowingstatementsarecorrect?

I.Acompany'schoiceofaccountingprinciplesforfinancialreportingpurposesaffectsnetcashflowfortheaccountingperiod.

II.Acompany'schoiceofaccountingprinciplesforfinancialreportingpurposesdoesnotaffectoperatingcashflow.

III.Ifacompanysellsitsreceivables,thiswillincreaseoperatingcashflow.

IV.Ifacompanysellsitsreceivables,thiswillincreasefinancingcashflow.

A.

IandIII

B.

I,II,andIII

C.

IIandIV

D.

IandIV

15.

Anincreaseinaccountspayablewouldbeconsidered:

A.

asourceofcash.

B.

auseofcash.

C.

anadjustingentry.

D.

anoncashchargetoincome.

HuptaCorporationreportsfortheyearendedDecember31,2005,salesof$9,430andcostofgoodssoldof$6,500.OtherinformationasofDecember31isasfollows:

16.

CashpaidtosuppliersforyearendedDecember31,2005,is:

A.

$6,480.

B.

$6,440.

C.

$5,520.

D.

$6,560.

17.

CashcollectedfromcustomersfortheyearendedDecember31,2005,is:

A.

$9,480.

B.

$9,430.

C.

$8,930.

D.

$8,980.

Belowisanexampleofanincorrectlypreparedstatementofcashflows.Thedescriptionsofactivitiesarecorrect.

18.

Thecorrectcashflowsfromoperatingactivitiesis:

A.

$65,500.

B.

$63,500.

C.

$53,500.

D.

Noneoftheabove

19.

Thecorrectcashflowsfrominvestingactivitiesis:

A.

($41,000).

B.

($45,500).

C.

($48,000).

D.

Noneoftheabove

20.

Thecorrectcashflowsfromfinancingactivitiesis:

A.

($4,500).

B.

$3,000.

C.

$1,000.

D.

Noneoftheabove

21.

Thecorrectchangeincashfortheyearis:

A.

$4,000

B.

$15,000

C.

$16,500

D.

Noneoftheabove

22.

Themanagementofacompanywishestowindow-dressitscashflowfromoperations.Whichofthefollowingwillimprovecashflowfromoperations?

I.Factoringaccountsreceivable

II.Payingsuppliersmorequickly

III.Sellingofsomeexcessmarketablesecurities

IV.Deferringpaymentoftaxes

A.

IVonly

B.

IIIandIV

C.

II,III,andIV

D.

IandIV

TracyCompanyreportsthefollowinginitsstatementofcashflows:

23.

IfTracyshowscostofgoodssoldof$2,050onitsincomestatement,cashpaidtosuppliersis:

A.

$1,550.

B.

$1,950.

C.

$2,150.

D.

$2,650.

24.

IfTracyshowsdepreciationexpenseof$275initsincomestatement,cashpaidforamortizationis:

A.

$0

B.

$75

C.

$525

D.

notdeterminable

25.

Tracyusedtheindirectmethodofdeterminingcashflowfromoperations(CFO).Ifithadusedthedirectmethod:

A.

CFOwouldhavebeenhigherasgainsarenotdeductedinarrivingatCFO.

B.

CFOwouldhavebeenloweraslossesanddepreciationarenotaddedbackinarrivingatCFO.

C.

CFOwouldhavebeenthesame.

D.

itisnotpossibletodeterminewhatCFOwouldhavebeenwithoutmoreinformation.

26.

Whichofthefollowingitemsisdeductedfromnetincometoarriveatcashflowfromoperationswhenusingtheindirectmethod?

A.

Depreciationexpense

B.

Amortizationexpense

C.

Decreaseina