Question 1

Buhler Ltd. had the following activity during a recent period:  Instructions 
a) Determine the net cash flow from operating activities.
b) Determine the net cash flow from investing activities.
c) Determine the net cash flow from financing activities.

Accepted Answer

The answer of Buhler Ltd. had the following activity during...

Question 2

All of the following are examples of common cash flow challenges, except for

Accepted Answer

A)   a significant decrease in sales volumes.
B)   lengthy cash-to-cash sales cycle.
C)   inadequate capitalization.
D)   a significant increase in sales volumes.E) None of the above
F) A) and B)

Question 3

When analyzing a company's cash flow situation, the term "capitalization" refers to

Accepted Answer

A)   how much cash the company has to start with.
B)   how many capital assets the company has purchased during the period.
C)   the amount of common shares sold during the period.
D)   the length of time in the lead/lag relationship.E) C) and D)
F) None of the above

Question 4

The following items are reported on a company's Statement of Income. Which of them is most likely equal to its cash flow impact?

Accepted Answer

A)   Depreciation expense
B)   Gain on sale of capital assets
C)   Loss on sale of investment
D)   Interest expenseE) B) and C)
F) A) and C)

Question 5

The components of a Statement of Cash Flows are investing, financing, and operating activities.

Accepted Answer

A) True 
 B)False

Question 6

A company can only analyze its operations properly provided it has all detailed financial statements.

Accepted Answer

A) True 
 B)False

Question 7

All of the following statements are true, except

Accepted Answer

A)   to analyze operations properly you need both the Statement of Income and the Statement of Cash Flows.
B)   in the long run total profits and net cash flows will be very similar.
C)   the Statement of Cash Flows considers events that the Statement of Income does not.
D)   the Statement of Cash Flows and the Statement of Income both cover the period of a year because profits and cash flows are very similar over the period of a year.E) None of the above
F) A) and B)

Question 8

A banker contemplating a loan to a company should focus on which section(s)  of the Statement of Cash Flows in order to determine the company's ability to repay the loan?

Accepted Answer

A)   Operating activities
B)   Operating and financing activities
C)   Investing activities
D)   Operating and investing activitiesE) None of the above
F) C) and D)

Question 9

The direct method of Statement of Cash Flows preparation is

Accepted Answer

A)   widely used in practice.
B)   preferred by standard setters.
C)   misunderstood by investors.
D)   inconsistent and provided different operating results.E) A) and B)
F) C) and D)

Question 10

If a company had growing sales, which of the following would normally be expected on the Statement of Cash Flows?

Accepted Answer

A)   an increase in both accounts receivable and accounts payable
B)   a decrease in both accounts receivable and accounts payable
C)   a decrease in accounts receivable and an increase in accounts payable
D)   an increase in accounts receivable and a decrease in accounts payableE) A) and B)
F) All of the above

Question 11

Which of the following would be considered a continuing source of cash?

Accepted Answer

A)   cash from issuing common shares
B)   cash from refinancing debt
C)   cash from reducing cash and cash equivalents
D)   cash from operationsE) None of the above
F) A) and C)

Question 12

A negative net free cash flow is considered to be a good thing.

Accepted Answer

A) True 
 B)False

Question 13

Use the following information to answer following questions 
QUE Ltd had the following activity during 2020: 
-What was the cash flow from investing activities?

Accepted Answer

A)   $16,000
B)   $156,000
C)   $173,000
D)   $189,000E) A) and B)
F) B) and D)

Question 14

McKim Cringan George reported a cash position of $35,000 and as of December 31, after its first year of operations. McKim also reported the following:  How much cash was provided through McKim's financing activities?

Accepted Answer

A)   $100,000
B)   $ 93,000
C)   $ 90,000
D)   $ 0E) A) and B)
F) A) and C)

Question 15

Under the indirect approach, adjustments must be made to net income in the operations section for all of the following items, except

Accepted Answer

A)   depreciation.
B)   gain on the sale of equipment.
C)   loss on the sale of land.
D)   proceeds for the issuance of preferred shares.E) B) and C)
F) All of the above

Question 16

A company has surplus cash available and decides to purchase a 120-day treasury bill. The correct classification of the purchase on the Statement of Cash Flows would be

Accepted Answer

A)   as an net change in cash equivalents.
B)   as a cash outflow in operating activities.
C)   as a cash outflow in investing activities.
D)   as a cash outflow in financing activities.E) B) and C)
F) A) and C)

Question 17

Cash from operating activities will be the same using either the direct or indirect method to prepare the Statement of Cash Flows.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following would be an example of an investing activity on the Statement of Cash Flows?

Accepted Answer

A)   issuance of bonds payable
B)   purchase of bonds as an investment
C)   issuance of common shares
D)   collection of rent from tenantsE) C) and D)
F) A) and C)

Question 19

Tripe H Enterprises reported $26,000 of cash from operating activities and the following data:

Accepted Answer

A)   $10,000 income.
B)   $54,000 loss.
C)   $28,000 loss.
D)   $8,000 loss.E) All of the above
F) B) and D)

Question 20

Cash from operations is negatively impacted by all of the following, except

Accepted Answer

A)   increasing inventory.
B)   increasing accounts receivable.
C)   decreasing accounts payable.
D)   increasing accounts payable.E) All of the above
F) B) and C)

Exam 5: The Statement of Cash Flows

A negative net free cash flow is considered to be a good thing.

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Use the following information to answer following questions QUE Ltd had the following activity during 2020: -What was the cash flow from investing activities?

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Which of the following would be considered a continuing source of cash?

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All of the following are examples of common cash flow challenges, except for

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A banker contemplating a loan to a company should focus on which section(s) of the Statement of Cash Flows in order to determine the company's ability to repay the loan?

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Buhler Ltd. had the following activity during a recent period: Instructions a) Determine the net cash flow from operating activities. b) Determine the net cash flow from investing activities. c) Determine the net cash flow from financing activities.

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Under the indirect approach, adjustments must be made to net income in the operations section for all of the following items, except

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McKim Cringan George reported a cash position of $35,000 and as of December 31, after its first year of operations. McKim also reported the following: How much cash was provided through McKim's financing activities?

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A company can only analyze its operations properly provided it has all detailed financial statements.

Correct AnswerverifiedShow Answer

Cash from operating activities will be the same using either the direct or indirect method to prepare the Statement of Cash Flows.

Correct AnswerverifiedShow Answer

The direct method of Statement of Cash Flows preparation is

Correct AnswerverifiedShow Answer

A company has surplus cash available and decides to purchase a 120-day treasury bill. The correct classification of the purchase on the Statement of Cash Flows would be

Correct AnswerverifiedShow Answer

The following items are reported on a company's Statement of Income. Which of them is most likely equal to its cash flow impact?

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All of the following statements are true, except

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Which of the following would be an example of an investing activity on the Statement of Cash Flows?

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The components of a Statement of Cash Flows are investing, financing, and operating activities.

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Cash from operations is negatively impacted by all of the following, except

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If a company had growing sales, which of the following would normally be expected on the Statement of Cash Flows?

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Tripe H Enterprises reported $26,000 of cash from operating activities and the following data:

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When analyzing a company's cash flow situation, the term "capitalization" refers to

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