Question 1 which of the following adjustments to convert net income
Which of the following adjustments to convert net income to net cash provided by operating activities is incorrect?
Add to Net IncomeDeduct from Net Income
Which of the following transactions does not affect cash during a period?
Collection of an accounts receivable
Sale of treasury stock
Exercise of the call option on bonds payable
Write-off of an uncollectible account
Indicate where the event purchased land and a building with a mortgage would appear, if at all, on the indirect statement of cash flows.
Investing activities section
Financing activities section
Does not represent a cash flow
Operating activities section
The statement of cash flows
is used to assess an entity’s ability to pay dividends and meet obligations.
reflects earnings per share figures on a cash basis and on an accrual basis in the body of the statement.
is prepared instead of an income statement under generally accepted accounting principles.
is prepared from comparative income statements.
The cash effects of transactions that create revenues and expenses are
In Garland Company, land decreased $140,000 because of a cash sale for $140,000, the equipment account increased $40,000 as a result of a cash purchase, and Bonds Payable increased $130,000 from issuance for cash at face value. The net cash provided by investing activities is
If accounts receivable have increased during the period,
revenues on an accrual basis are less than revenues on a cash basis.
revenues on an accrual basis are greater than revenues on a cash basis.
revenues on an accrual basis are the same as revenues on a cash basis.
expenses on an accrual basis are greater than expenses on a cash basis
The following data are available for Quarter Company.
Increase in accounts payable$120,000
Increase in bonds payable400,000
Sale of investments150,000
Issuance of common stock180,000
Payment of cash dividends90,000
Net cash provided by financing activities is:
Which of the following adjustments to convert net income to net cash provided by operating activities is correct?
Add to Net Income Deduct from Net Income
Accounts Receivable increase decrease
Prepaid Expensesincrease decrease
Inventory decrease increase
Taxes Payable decrease increase
On the statement of cash flows using the indirect method, patent amortization expense will
be added to net income in the operating section.
appear as an inflow of cash in the investing section.
appear as an outflow of cash in the investing section.
be deducted from net income in the operating section.
Blocker Company reported a net loss of $5,000 for the year ended December 31, 2013. During the year, accounts receivable increased $14,000, merchandise inventory decreased $10,000, accounts payable decreased by $20,000, and depreciation expense of $10,000 was recorded. During 2013, operating activities
provided net cash of $27,000.
provided net cash of $17,000.
used net cash of $19,000.
used net cash of $27,000
Joan’s Vegetable Market had the following transactions during 2013:
1. Issued $60,000 of par value common stock for cash.
2. Repaid a 6 year note payable in the amount of $21,000.
3. Acquired land by issuing common stock of par value $50,000.
4. Declared and paid a cash dividend of $5,000.
5. Sold a long-term investment (cost $63,000) for cash of $6,000.
6. Acquired an investment in IBM stock for cash of $10,000.
What is the net cash provided by financing activities?
Land acquired from the issuance of common stock is reported
in a separate schedule at the bottom of the statement.
as an investing activity.
as an operating activity.
as a financing activity.
Using the indirect method, patent amortization expense for the period
is added to net income.
is deducted from net income.
causes cash to decrease.
causes cash to increase.
The statement of cash flows reports each of the following except
the net change in cash.
cash receipts from operating activities.
cash payments from investing activities.