Question

Can someone please check to see if I answered these correctly?

1) Which is a source of cash?

a.            increase in inventory

b.            decrease in bonds payable

c.             decrease in accounts payable

d.            decrease in accounts receivable

e.            increase in prepaid assets

2) In the Statement of Cash Flows, U.S. GAAP views cash received in the form of interest and dividends as coming from _____.

a.            investing activities

b.            operating activities

c.             financing activities

d.            exchange activities

e.            economic activities

3) IFRS permits firms to classify cash from interest and dividend revenue as _____ activities, provided the classification is consistently applied across periods.

a.            Operating

b.            Investing

c.             Financing

d.            operating, investing, or financing

e.            None of the above are correct.

4) Both U.S. GAAP and IFRS permit considerable flexibility with respect to the display of information in the statement of cash flows. Firms must report cash flows from operations, investing, and financing for the _____.

a.            current year

b.            current year and the prior year

c.             current year and the prior two years

d.            current year and the prior three years

e.            current year and the prior four years

ANS:      C             PTS:       1              DIF:        2              REF:       pp. 169-172

5) U.S. GAAP requires the disclosure of the direct exchange (with no cash consideration) of a tract of land for manufacturing equipment to be used in the company's operations

a.            as an operating activity.

b.            as an investing activity.

c.             as a financing activity.

d.            as an exchange activity.

e.            in a separate schedule or note, but does not appear in the statement of cash flows as an operating activity, investing activity, or a financing activity.

6) If cash decreases by $10,000 during the year, liabilities decrease by $5,000, and shareholders' equity increases by $5,000, what is the total change in noncash assets for the year?

a.            a decrease of $5,000

b.            an increase of $10,000

c.             a decrease of $10,000

d.            an increase of $5,000

e.            an increase of $15,000

7) Firms have some choice as to when they disburse cash. A firm may delay making payments to suppliers, employees, and others during the last several days of an accounting period. When this firm makes the cash payments during the early part of the next period, cash flow from

a.            operations decreases.

b.            operations increases.

c.             financing decreases.

d.            financing increases.

e.            investing decreases.

8) Increased earnings

a.            are reflected as an increase in cash flow.

b.            do not always generate an increase in cash flow.

c.             result in a decrease in cash flow only if dividends are paid.

d.            are the starting point for the direct method cash flow statement.

e.            include none of the above.

9) Barkley Inc.’s record keeping system incorporates the appropriate classification codes into the initial recording of transactions in the Cash account and then prepares the statement of cash flows. One can prepare the statement of cash flows by examining every transaction affecting the cash account, and classifying each as

a.            a cash receipts, cash disbursements, or financing activity.

b.            an operating, investing, or financing activity.

c.             a cash receipts, cash disbursements, or investing activity.

d.            a cash receipts, cash disbursements, or operating activity.

e.            a cash receipts, cash disbursements, or exchange activity.

Answer 1

Dear student, I have checked the answers and each answer is correct.

Following are the answers:

1) d. decrease in accounts receivable

2) b. operating activities

3) d.operating, investing, or financing

4) c. current year and the prior two years

5) e. in a separate schedule or note, but does not appear in the statement of cash flows as an operating activity, investing activity, or a financing activity.

6)b. an increase of $10,000

7) a. operations decreases.

8) a.are reflected as an increase in cash flow.

9) b.an operating, investing, or financing activity.