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Selected data and additional information from the company's records are presented below: Selected data and additional information from the company's records are presented below: Additional information: -Refer to Mary Kay Cosmetics. What amount was paid to retire bonds payable during 2014? Additional information: Selected data and additional information from the company's records are presented below: Additional information: -Refer to Mary Kay Cosmetics. What amount was paid to retire bonds payable during 2014? -Refer to Mary Kay Cosmetics. What amount was paid to retire bonds payable during 2014?

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$ -0-
Cash was not paid to retire the bo...

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A(n)____________________ occurs when the cash received from selling an item of property, plant, and equipment is greater than the book value of the asset sold. It is also shown in the operating activities section of the statement of cash flows prepared using the indirect method.

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Which of the following is not an investing activity?


A) Purchase of investments for cash.
B) Purchase of equipment for cash.
C) Sale of merchandise for cash.
D) Sale of land for cash.

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Which of the following transactions is not a significant noncash investing and financing activity?


A) Land is purchased by issuing a 20-year mortgage note payable.
B) Bonds are issued to purchase a building.
C) Cash equivalents are purchased.
D) Buildings are acquired by issuing common stock.

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The purchase of inventory is an important ____________________ activity for a retailer.

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Which of the following statements is false?


A) A balance sheet reports a company's cash balance at a specific date.
B) An income statement reports the amounts of revenue and expense on an accrual basis.
C) A statement of retained earnings reports the amount of cash received from operating activities and the amount of cash paid for dividends.
D) A statement of cash flows explains the changes in cash from operating, investing, and financing activities.

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Which of the following statements regarding the statement of cash flows is true?


A) The statement of cash flows analyzes the changes in consecutive balance sheets in conjunction with the income statement.
B) The statement of cash flows is organized to present classifications for total cash inflows and cash outflows.
C) The statement of cash flows analyzes only the changes in current assets and current liabilities.
D) The statement of cash flows is an optional financial statement.

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A used car dealer reported the following information: A used car dealer reported the following information: Assuming there was no change in inventory during the period, how much cash was paid for merchandise purchases during 2014? A) $655,000 B) $610,000 C) $515,000 D) $605,000 Assuming there was no change in inventory during the period, how much cash was paid for merchandise purchases during 2014?


A) $655,000
B) $610,000
C) $515,000
D) $605,000

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Selected data and additional information from the company's records are presented below: Selected data and additional information from the company's records are presented below: Additional information: -Refer to Mary Kay Cosmetics. What is the amount paid for operating expenses during 2014? Additional information: Selected data and additional information from the company's records are presented below: Additional information: -Refer to Mary Kay Cosmetics. What is the amount paid for operating expenses during 2014? -Refer to Mary Kay Cosmetics. What is the amount paid for operating expenses during 2014?

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$155,000
$160,000 (Operating e...

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When using the direct method to determine operating cash flows, how is the issuance of stock for cash shown on the Statement of Cash Flows?


A) operating activity
B) investing activity
C) financing activity
D) noncash investing and financing activity
E) not reported on the statement of cash flows

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When using the direct method to determine operating cash flows, how is the payment of a cash dividend shown on the Statement of Cash Flows?


A) operating activity
B) investing activity
C) financing activity
D) noncash investing and financing activity
E) not reported on the statement of cash flows

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Selected information from the company's financial records is presented below: Selected information from the company's financial records is presented below: During 2014, the company sold equipment with a cost of $50,000 and accumulated depreciation of $30,000. A gain of $10,000 was recognized on the sale of the equipment. This was the only equipment sale during the year. -Refer to Metalcrafts, Inc. What amount would be reported as the cash proceeds from the sale of equipment? A) $50,000 B) $20,000 C) $10,000 D) $30,000 During 2014, the company sold equipment with a cost of $50,000 and accumulated depreciation of $30,000. A gain of $10,000 was recognized on the sale of the equipment. This was the only equipment sale during the year. -Refer to Metalcrafts, Inc. What amount would be reported as the cash proceeds from the sale of equipment?


A) $50,000
B) $20,000
C) $10,000
D) $30,000

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If the balance of prepaid insurance was the same on January 1, 2014, and December 31, 2014, then the insurance expense must have been ____________________ the cash payments made for insurance during the year.

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The statement of cash flows helps users understand the reasons for the differences between net income and related cash receipts and payments.

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The following items were reported by Morris Plumbing Company: The following items were reported by Morris Plumbing Company: What amount would be reported in the operating activities section of the statement of cash flows for Collections from Customers under the direct method, assuming that all sales are on credit? A) $975,000 B) $1,025,000 C) $1,225,000 D) $1,250,000 What amount would be reported in the operating activities section of the statement of cash flows for Collections from Customers under the direct method, assuming that all sales are on credit?


A) $975,000
B) $1,025,000
C) $1,225,000
D) $1,250,000

Correct Answer

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The following items were obtained from the financial records: The following items were obtained from the financial records: How would the change in accounts receivable be reported in the operating activities section of the statement of cash flows under the indirect method? A) As an addition to sales. B) As a deduction from sales. C) As an addition to net income. D) As a deduction from net income. How would the change in accounts receivable be reported in the operating activities section of the statement of cash flows under the indirect method?


A) As an addition to sales.
B) As a deduction from sales.
C) As an addition to net income.
D) As a deduction from net income.

Correct Answer

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Selected data and additional information from the company's records are presented below: Selected data and additional information from the company's records are presented below: Additional information: -Refer to Mary Kay Cosmetics. What is the amount paid to suppliers for purchases of merchandise during 2014? Additional information: Selected data and additional information from the company's records are presented below: Additional information: -Refer to Mary Kay Cosmetics. What is the amount paid to suppliers for purchases of merchandise during 2014? -Refer to Mary Kay Cosmetics. What is the amount paid to suppliers for purchases of merchandise during 2014?

Correct Answer

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$738,000
$700,000 (Cost of goo...

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Which of the following operating activities results in a cash outflow?


A) paying creditors for merchandise
B) collecting accounts receivable
C) making cash sales
D) receiving deposits recorded as unearned revenue

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Which of the following is not an operating activity?


A) Cash collections from credit customers.
B) Cash payments for operating expenses.
C) Cash receipts for interest earned.
D) Cash payments for dividends to stockholders.

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A company reported the following information: A company reported the following information: How much cash was paid for insurance during 2014? A) $22,700 B) $27,700 C) $39,200 D) $36,700 How much cash was paid for insurance during 2014?


A) $22,700
B) $27,700
C) $39,200
D) $36,700

Correct Answer

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