Kieso15e Testbank Ch23
CHAPTER 23
STATEMENT OF CASH FLOWS
IFRS questions are available at the end of this chapter.
TRUE-FALSe—Conceptual
Answer No. Description F 1. Primary purpose of the statement of cash flows. T 2. Information provided by statement of cash flows. T 3. Classification of operating activities. F 4. First step in cash flow statement preparation. T 5. Reconciling beginning and ending cash balances. F 6. FASB’s recommended method. T 7. Decrease in accounts receivable and cash-basis revenues. F 8. Decrease in prepaid expenses. F 9. Net income and net cash flow from operating activities. T 10. Converting net income to net cash flow from operating activities. F 11. Income from equity method investment. T 12. Computing cash receipts from customers. F 13. Computing cash payments for operating expenses. F 14. Reporting cash receipts/disbursements in direct method. T 15. Indirect method adjustments. F 16. Amortization of bond premium. T 17. Purchases and sales of trading securities. T 18. Disclosing noncash investing and financing activities. F 19. Use of cash flow worksheet. T 20. Reporting stock dividends on worksheet.
Multiple Choice—Conceptual
Answer No. Description c 21. Objective of the statement of cash flows. c 22. Primary purpose of the statement of cash flows. c S23. Answers provided by the statement of cash flows. b S24. First step in cash flow statement preparation. d 25. Definition of cash equivalents. d 26. Cash flow effect of a short-term nontrade note payable. c P27. Classifying items as investing activities. b P28. Classification of a financing activity. b S29. Reporting amortization of bond premium. c S30. Converting accrual based expense to cash basis. c S31. Reporting revenues and expenses on a cash basis. c 32. Cash flow effects of major repairs on machinery. b 33. Adjustment to income for inventory increase. c 34. Adjustment under the direct and indirect methods. c 35. Adjustment to cost of goods sold under the direct
STATEMENT OF CASH FLOWS
IFRS questions are available at the end of this chapter.
TRUE-FALSe—Conceptual
Answer No. Description F 1. Primary purpose of the statement of cash flows. T 2. Information provided by statement of cash flows. T 3. Classification of operating activities. F 4. First step in cash flow statement preparation. T 5. Reconciling beginning and ending cash balances. F 6. FASB’s recommended method. T 7. Decrease in accounts receivable and cash-basis revenues. F 8. Decrease in prepaid expenses. F 9. Net income and net cash flow from operating activities. T 10. Converting net income to net cash flow from operating activities. F 11. Income from equity method investment. T 12. Computing cash receipts from customers. F 13. Computing cash payments for operating expenses. F 14. Reporting cash receipts/disbursements in direct method. T 15. Indirect method adjustments. F 16. Amortization of bond premium. T 17. Purchases and sales of trading securities. T 18. Disclosing noncash investing and financing activities. F 19. Use of cash flow worksheet. T 20. Reporting stock dividends on worksheet.
Multiple Choice—Conceptual
Answer No. Description c 21. Objective of the statement of cash flows. c 22. Primary purpose of the statement of cash flows. c S23. Answers provided by the statement of cash flows. b S24. First step in cash flow statement preparation. d 25. Definition of cash equivalents. d 26. Cash flow effect of a short-term nontrade note payable. c P27. Classifying items as investing activities. b P28. Classification of a financing activity. b S29. Reporting amortization of bond premium. c S30. Converting accrual based expense to cash basis. c S31. Reporting revenues and expenses on a cash basis. c 32. Cash flow effects of major repairs on machinery. b 33. Adjustment to income for inventory increase. c 34. Adjustment under the direct and indirect methods. c 35. Adjustment to cost of goods sold under the direct