St. Leo ACC 202 Principles of Accounting II Accounting Test 2

1.Question :The direct method for the preparation of the operating activities section of the statement of cash flows:

Student Answer: Separately lists each major item of operating cash receipts and cash payments 

Reports adjustments to reconcile net income to net cash provided or used by operating activities in the statement 

Reports a different amount of cash flows from operations than if the indirect method is used 

Is required if the company is a merchandiser 

Is required by the FASB 

Points Received:1 of 1 

Comments:

2.Question :Use the following information to calculate cash received from dividends:

Student Answer: $26,400 

$29,000 

$29,800 

$30,600 

$32,400 

Points Received:1 of 1 

Comments:

3.Question :The indirect method for the preparation of the operating activities section of the statement of cash flows:

Student Answer: Separately lists each major item of operating cash receipts 

Separately lists each major item of operating cash payments 

Reports net income and then adjusts it for items necessary to determine net cash provided or used by operating activities 

Is required if the company is a merchandiser 

Must not be used in all circumstances 

Points Received:1 of 1 

Comments:

4.Question :Cash flows from selling trading securities are reported in the statement of cash flows as part of:

Student Answer: Operating activities 

Financing activities 

Investing activities 

Noncash activities 

None of these. This is not reported in the statement of cash flows 

Points Received:1 of 1 

Comments:

5.Question :Use the cash flow on total assets ratio to determine which of these three companies is most efficiently using its assets.

Student Answer: Company A 

Company B 

Company C 

As all the companies have the same cash from operations, they are all equally efficient in the use of their assets 

Cannot be determined from the given information 

Points Received:1 of 1 

Comments:

6.Question :Activities that involve the production or purchase of merchandise and the sale of goods and services to customers, including expenditures related to administering the business, are classified as:

Student Answer: Financing activities 

Investing activities 

Operating activities 

Direct activities 

Indirect activities 

Points Received:1 of 1 

Comments:

7.Question :The appropriate section in the statement of cash flows for reporting the cash payment of wages is:

Student Answer: Operating activities 

Financing activities 

Investing activities 

Schedule of noncash investing or financing activity 

None of these. This is not reported on the statement of cash flows 

Points Received:1 of 1 

Comments:

8.Question :A cash equivalent is an investment that:

Student Answer: Is readily convertible to a known amount of cash 

Is sufficiently close to its maturity date so that its market value is unaffected by interest rate changes 

Generally is within 3 months of its maturity date 

Is highly liquid 

All of the above 

Points Received:1 of 1 

Comments:

9.Question :A company's inventory balance at 12/31/08 was $200,000 and was $188,000 at 12/31/09. Its accounts payable balance at 12/31/08 was $80,000 and was $84,000 at 12/31/09 and its cost of goods sold for 2009 was $720,000. The company's total amount of cash payments for merchandise in 2009 equals:

Student Answer: $704,000 

$712,000 

$720,000 

$728,000 

$736,000 

Points Received:1 of 1 

Comments:

10.Question :A company had cost of goods sold of $150,000 during a given period. Compute cash paid for merchandise during this period given the following data.

Student Answer: $145,500 

$159,500 

$140,500 

$154,500 

$157,000 

Points Received:1 of 1 

Comments:

11.Question :When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from operating activities generally affect:

Student Answer: Net income, current assets and current liabilities 

Noncurrent assets 

Noncurrent liability and the equity accounts 

Both noncurrent assets and noncurrent liabilities 

Equity accounts only 

Points Received:1 of 1 

Comments:

12.Question :When the operating activities section of the statement of cash flows is reported using the direct method, the FASB requires:

Student Answer: The preparation of the statement of cash flows under the indirect method be completed and reported with the statement of cash flows prepared using the direct method 

A reconciliation of net income to net cash provided or used by operating activities 

Footnotes to the financial statements disclosing the difference between net income and the cash provided or used by financing activities 

The income statement to be prepared under the cash basis of accounting 

Noncash investing and financing activities be included in the statement of cash flows 

Points Received:0 of 1 

Comments:

13.Question :Assume the following information was available for the current year's operations of Jungle Jim's International Market. Use these data to calculate the cash paid for merchandise.

Student Answer: $218,000 

$223,200 

$220,000 

$228,800 

$234,000 

Points Received:1 of 1 

Comments:

14.Question :The appropriate section in the statement of cash flows for reporting the issuance of common stock for cash is:

Student Answer: Operating activities 

Financing activities 

Investing activities 

Schedule of noncash investing or financing activity 

None of these. This is not reported on the statement of cash flows 

Points Received:1 of 1 

Comments:

15.Question :The statement of cash flows helps analysts evaluate the:

Student Answer: Source of cash for debt repayments 

Source of cash for plant expansion 

Differences between net income and net operating cash flow 

Means used to finance investing activities 

All of the above