ACC201 Chapter 13

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20 Questions - Developed by: Karli - Developed on: - 2.802 taken

Chapter 13 Quiz

  • 1
    The statement of cash flows is a required statement that must be prepared along with an income statement, balance sheet, and retained earnings statement
  • 2
    For external reporting, a company must prepare either an income statement or a statement of cash flows, but not both
  • 3
    A primary objective of the statement of cash flows is to show the income or loss on investing and financing transactions
  • 4
    A statement of cash flows indicates the sources and uses of cash during a period
  • 5
    A statement of cash flows should help investors and creditors assess the entity's ability to generate future income
  • 6
    The information in a statement of cash flows helps investors and creditors assess the company's ability to pay dividends and meet obligations
  • 7
    Financial statement readers can determine future investing and financing transactions by examining a company's statement of cash flows
  • 8
    In preparing a statement of cash flows, the issuance of debt should be reported separately from the retirement of debt
  • 9
    Noncash investing and financing activities must be reported in the body of a statement of cash flows
  • 10
    The statement of cash flows classifies cash receipts and payments as operating, non operating, financial, and extraordinary activities
  • 11
    The sale of land for cash would be classified as a cash inflow from an investing activity
  • 12
    Cash flow from investing activities is considered the most important category on the statement of cash flows because it is considered the best measure of expected income
  • 13
    The receipt of dividends from long-term investments in stock is classified as a cash inflow from investing activities
  • 14
    The payment of interest on bonds payable is classified as a cash outflow from operating activities
  • 15
    Any item that appears on the income statement would be considered as either a cash inflow or cash outflow from operating activities
  • 16
    The acquisition of a building by issuing bonds would be considered an investing and financing activity that did not affect cash
  • 17
    All major financing and investing activities affect cash
  • 18
    Cash provided by operations is generally equal to operating income
  • 19
    Using the indirect method, an increase in accounts receivable during a period is deducted from net income in calculating cash provided by operations
  • 20
    Using the indirect method, an increase in accounts payable during a period is deducted from net income in calculating cash provided by operations

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