1 When using the indirect method to prepare the statement of cash flows, depletion expense should be presented as a(n): A) investing and financing activity not affecting cash. B) addition to net income. C) deduction from net income. D) cash flow fro
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| 1 |  | When using the indirect method to prepare the statement of cash flows, depletion expense should be presented as a(n): | ||
| [removed]A) | investing and financing activity not affecting cash. | ||
| [removed]B) | addition to net income. | ||
| [removed]C) | deduction from net income. | ||
| [removed]D) | cash flow from financing activities. | ||
| [removed]E) | cash flow from investing activities. | ||
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| 2 | | Which of the following would be added to net income for purposes of constructing a statement of cash flows using the indirect method? | ||
| [removed]A) | An increase in accounts payable | ||
| [removed]B) | An increase in accrued liabilities | ||
| [removed]C) | An increase in accumulated depreciation | ||
| [removed]D) | An increase in prepaid expenses | ||
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| 3 | | An increase in the Accounts Receivable account of a company from $40,000 at the beginning of the year to $60,000 at the end of the year would be shown on the company's statement of cash flows prepared under the indirect method as: | ||
| [removed]A) | an addition to net income of $20,000 in order to arrive at cash flows from operating activities. | ||
| [removed]B) | an addition to net income of $40,000 in order to arrive at cash flows from operating activities. | ||
| [removed]C) | a deduction from net income of $20,000 in order to arrive at cash flows from operating activities. | ||
| [removed]D) | a deduction from net income of $60,000 in order to arrive at cash flows from operating activities. | ||
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| 4 | | An increase in the Prepaid Insurance account of $5,000 over the course of a year would be shown on the company's statement of cash flows prepared under the indirect method as: | ||
| [removed]A) | an addition of $5,000 under financing activities. | ||
| [removed]B) | a deduction of $5,000 under financing activities. | ||
| [removed]C) | an addition to net income of $5,000 in order to arrive at net cash provided by operating activities. | ||
| [removed]D) | a deduction from net income of $5,000 in order to arrive at net cash provided by operating activities. | ||
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| 5 | | An increase in the Income Taxes Payable account of a company from $20,000 at the beginning of the year, to $60,000 at the end of the year, would be shown on the company's statement of cash flows prepared under the indirect method as: | ||
| [removed]A) | an addition to net income of $40,000 in order to arrive at cash flows from operating activities. | ||
| [removed]B) | a cash flow of $40,000 under the investing activities heading. | ||
| [removed]C) | a cash flow of $40,000 under the financing activities heading. | ||
| [removed]D) | a deduction from net income of $40,000 in order to arrive at cash flows from operating activities. | ||
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| 6 | | LPL Company recorded the following events for the year just ended.
| ||
| [removed]A) | $70,000. | ||
| [removed]B) | $90,000. | ||
| [removed]C) | $190,000. | ||
| [removed]D) | $280,000. | ||
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| 7 | | LPL Company recorded the following events for the year just ended.
| ||
| [removed]A) | ($5,000). | ||
| [removed]B) | $10,000. | ||
| [removed]C) | $40,000. | ||
| [removed]D) | $260,000. | ||
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| 8 | | Tip Top Company recorded the following activity for the year just ended:
| ||
| [removed]A) | $400,000. | ||
| [removed]B) | $520,000. | ||
| [removed]C) | $560,000. | ||
| [removed]D) | $600,000. | ||
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| 9 | | Tip Top Company recorded the following activity for the year just ended:
| ||
| [removed]A) | $560,000. | ||
| [removed]B) | $760,000. | ||
| [removed]C) | $800,000. | ||
| [removed]D) | $820,000. | ||
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| 10 | | The sale of equipment at a gain would be shown on the statement of cash flows prepared under the indirect method in which of the following manners? The cash received would be shown: | ||
| [removed]A) | As an adjustment to net income and the gain would not appear on the statement of cash flows. | ||
| [removed]B) | Under Investing Activities and the gain would not appear on the statement of cash flows. | ||
| [removed]C) | Under Investing Activities and the gain would be added to net income. | ||
| [removed]D) | Under Investing Activities and the gain would be deducted from net income. | ||
12 years ago
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