exam learning
Chapter 21 The Statement of Cash Flows
True/False Questions
1. Amounts held in cash equivalent investments must be reported separately from amounts held as cash on the statement of cash flows.
Answer: False
Learning Objective: 2
Level of Learning:
2. Generally speaking, cash flows from operating activities include the elements of net income reported on a cash basis.
Answer: True
Learning Objective: 4
Level of Learning: 2
3. In using a spreadsheet to prepare the statement of cash flows, the spreadsheet entries duplicate the actual journal entries used to record the transactions during the year.
Answer: True
Learning Objective: 8
Level of Learning: 2
4. Interest payments on debt are classified as cash outflows from financing activities.
Answer: False
Learning Objective: 6
Level of Learning: 2
5. Transactions that represent noncash investing and financing should be reported in the statement of cash flows.
Answer: True
Learning Objective: 7
Level of Learning: 2
6. If the direct method is used to report cash flows from operating activities in the body of the statement of cash flows, a reconciliation of net income to net cash flows from operating activities also is required.
Answer: True
Learning Objective: 4
Level of Learning: 1
7. Cash paid for taxes and interest must be disclosed on the face of the statement or in the disclosure notes under both the direct and indirect methods of reporting cash flows from operating activities.
Answer: True
Learning Objective: 4
Level of Learning: 1
8. The purchase of treasury stock is an investing cash outflow.
Answer: False
Learning Objective: 5
Level of Learning: 1
9. A decrease in cash dividends payable means that dividends declared were less than dividends paid. Answer: True
Learning Objective: 4
Level of Learning: 2
10. When one enters a $50,000 credit entry to the Land account in a spreadsheet for the statement of cash flows, it
True/False Questions
1. Amounts held in cash equivalent investments must be reported separately from amounts held as cash on the statement of cash flows.
Answer: False
Learning Objective: 2
Level of Learning:
2. Generally speaking, cash flows from operating activities include the elements of net income reported on a cash basis.
Answer: True
Learning Objective: 4
Level of Learning: 2
3. In using a spreadsheet to prepare the statement of cash flows, the spreadsheet entries duplicate the actual journal entries used to record the transactions during the year.
Answer: True
Learning Objective: 8
Level of Learning: 2
4. Interest payments on debt are classified as cash outflows from financing activities.
Answer: False
Learning Objective: 6
Level of Learning: 2
5. Transactions that represent noncash investing and financing should be reported in the statement of cash flows.
Answer: True
Learning Objective: 7
Level of Learning: 2
6. If the direct method is used to report cash flows from operating activities in the body of the statement of cash flows, a reconciliation of net income to net cash flows from operating activities also is required.
Answer: True
Learning Objective: 4
Level of Learning: 1
7. Cash paid for taxes and interest must be disclosed on the face of the statement or in the disclosure notes under both the direct and indirect methods of reporting cash flows from operating activities.
Answer: True
Learning Objective: 4
Level of Learning: 1
8. The purchase of treasury stock is an investing cash outflow.
Answer: False
Learning Objective: 5
Level of Learning: 1
9. A decrease in cash dividends payable means that dividends declared were less than dividends paid. Answer: True
Learning Objective: 4
Level of Learning: 2
10. When one enters a $50,000 credit entry to the Land account in a spreadsheet for the statement of cash flows, it