Google Editors Please DO not delete this. This  a study guide I need
help with. My professor has thse and usese similiar questoins on his
tests.

	1.	Which of the following is an investing activity?
A.	Purchase of equipment
B.	Receipt of cash dividends
C.	Purchase of treasury stock
D.	Purchase of inventory
E.	None of the above

	2.	Depreciation expense is
A.	a source of cash.
B.	a use of cash.
C.	neither a source nor a use of cash.
D.	both a source and use of cash.
E.	None of the above

	3.	The receipt of dividends on stock investments would be reported on
the statement of cash flows under:
A.	investing activities
B.	non-cash investing and financing activities
C.	operating activities
D.	financing activities

	4.	Activities that obtain cash needed to launch and sustain the
business are referred to as:
A.	operating activities
B.	financing activities
C.	investing activities
D.	marketing activities

	5.	The receipt of dividends is reported in the operating activities
section of the statement of cash flows.

	6.	Activities that involve the production or delivery of goods for
sale or the providing of services for sales should be listed under
which classification on a statement of cash flows?
A.	operating activities   
C.	financing activities 
B.	investing activities   
D.	refunding activities

	7.	The payment of a cash dividend is reported on a statement of cash
flows as a(n):
A.	Operating activity (inflow)
B.	Investing activity (inflow)
C.	Financing activity (inflow)
D.	Financing activity (outflow)
E.	None of the above

	8.	A stock dividend is reported on a statement of cash flows as a(n):
A.	Operating activity
B.	Investing activity 
C.	Financing activity 
D.	Direct exchange
E.	None of the above

	9.	The following journal entry has what effect on the amount of cash
generated by operating activities?
	Depreciation Expense			$ 3,700
		Accumulated Depreciation			$ 3,700

A.	Increases cash flow
B.	Decreases cash flow
C.	Has no effect on cash flow
D.	May increase cash flow if there is a corresponding decrease in cash
flow in another account.
E.	None of the above

	10.	The adjustment to prepaid insurance at year end would         the
"payments to suppliers" reported on a direct method statement of cash
flows.
A.	increase
B.	decrease
C.	either increase or decrease depending upon the account used to
record the original payment
D.	have no effect on

	11.	On an indirect method statement of cash flows, a decrease in
prepaid expenses would be:
A.	added to net income
B.	deducted from net income
C.	netted against any increase in accrued liabilities
D.	reflected in the investing activities section

	12.	Johnson Industries began the year with $46,700 in accounts
receivable and ended the year with $31,900 in accounts receivable.  If
sales for the year were $687,000, the cash collected from customers
during the year amounted to:
A.	$701,800
B.	$672,200
C.	$733,700
D.	$655,100

	13.	In the long run, financing activities must be the main source of
a business's cash.

	14.	On an indirect method statement of cash flows, a decrease in a
current liability would be:
A.	included in payments to suppliers
B.	offset against increases in current assets
C.	added to net income
D.	deducted from net income

	15.	Which of the following expenses would never appear on a direct
method statement of cash flows?
A.	depreciation
B.	amortization
C.	interest
D.	both a and b are correct

	16.	Cost of goods sold, inventory, and accounts payable are all
analyzed to determine cash payments for inventory.

	17.	Investors analyzing cash-flow statements can discern which
companies are expanding and which companies are cutting back.

	18.	The direct method statement of cash flows reported $67,030 in
payments for insurance during the year.  The prepaid insurance account
had beginning and ending balances of $13,540 and $11,780,
respectively, for the same period.  The amount of insurance expense
reported on the income statement for the same year was:
A.	$67,030
B.	$65,270
C.	$68,790
D.	cannot be determined from the information given

	19.	Saks Company reported sales of $895,000 and its accounts
receivable balance increased $13,500 during the same period.  Cash
collections from customers for the period were:
A.	$895,000
B.	$13,500
C.	$908,500
D.	$881,500

	20.	Only the operating activities section of a statement of cash
flows differs between the direct and indirect methods.

	21.	The payment of interest on bonds would be reported on the
statement of cash flows under:
A.	operating activities
B.	financing activities
C.	investing activities
D.	non-cash investing and financing activities

	22.	Accruing wages expense at year end would          the "payments
to employees" reported on a direct method statement of cash flows.
A.	have no effect on
B.	increase
C.	decrease
D.	either a or b depending upon the account credited

	
The resale of treasury stock is reported on a statement of cash flows as a(n):
A.	Financing activity (outflow)
B.	Investing activity (inflow)
C.	Financing activity (inflow)
D.	Direct exchange
E.	None of the above

	24.	All of the following are activities that are reported on the
statement of cash flows except:
A.	operating activities
B.	marketing activities
C.	investing activities
D.	financing activities

	25.	The Highly Bizarre Clothing Store reports the following
information at year-end 19B.
		Net Income						 $4,000 
		Depreciation 						700 
		Increase in Accounts Receivable		100 
		Decrease in Inventory				500 
		Decrease in Accounts Payable		200 
		Cash Dividends Paid					300 
What is Net Cash Flow From Operating Activities for 19B? 
A.	$4,500
B.	$4,600
C.	$4,700
D.	$4,800
E.	$4,900

	26.	"Collections from customers" on the statement of cash flows
include both cash sales and collections of accounts receivable from
credit sales.

	27.	The retained earnings account had a beginning credit balance of
$234,500 and an ending credit balance of $411,000.  Net income for the
year was $199,500 and the only other event affecting retained earnings
was the declaration of dividends.  If there was no change in the
dividends payable account during the year, the payments for dividends
totaled:
A.	$376,000
B.	$23,000
C.	$176,500
D.	cannot be determined from the information given

	28.	All of the following are cash equivalents except:
A.	money market investments
B.	investments in U.S. Government Treasury Bills
C.	accounts receivable
D.	commercial paper

	29.	The statement of cash flows is a required financial statement
reporting where cash came from and how it was spent.

	30.	Equity-method investment revenue would be shown on the statement
of cash flows under:
A.	operating activities
B.	investing activities
C.	non-cash investing and financing activities
D.	equity-method investment revenue would not be shown on the
statement of cash flows

	31.	Although the Statement of Cash Flows discloses changes in cash
during the current year, it also:
A.	Summarizes the operating, financing and investing activities.
B.	Reports the changes in net working capital.
C.	Relates changes in net monetary assets to net working capital.
D.	Reflects transactions that affect current financial position.
E.	None of the above

	32.	In a statement of cash flows prepared using the indirect method,
depreciation expense should be treated as a (an)
A.	cash flow from investing activities.
B.	cash flow from financing activities.
C.	deduction from net income.
D.	addition to net income.
E.	an increase in the amount reported from investing activities.

	33.	Which of the following does the statement of cash flows provide
the least help for the  investors:
A.	Predicting an organization's future performance
B.	Determining if a firm has acquired the best management team.
C.	Determining if a firm is in danger of insolvency.
D.	Reconciling a company's net income with its net cash flow.
E.	None of the above

	34.	Collecting the principal on a loan would be reported on the
statement of cash flows under:
A.	investing activities
B.	operating activities
C.	financing activities
D.	non-cash investing and financing activities

	35.	The sale of equipment would be reported on the statement of cash flows under:
A.	non-cash investing and financing activities
B.	operating activities
C.	financing activities
D.	investing activities

	36.	All of the following are purposes of the statement of cash flows except:
A.	to help predict future cash flows
B.	to evaluate management decisions
C.	to report the earnings per share
D.	to determine the ability to pay dividends to stockholders and
interest and principal to creditors

	37.	The collection of a loan made to another company would be
reported on the statement of cash flows as a(n):
A.	Financing activity (outflow)
B.	Investing activity (outflow)
C.	Financing activity (inflow)
D.	Investing activity (inflow)
E.	None of the above

	38.	The payment of principal and interest on a loan would be reported
in the financing activities section of a statement of cash flows.

	39.	Activities affecting long-term assets are referred to as:
A.	operating activities
B.	financing activities
C.	investing activities
D.	marketing activities

	40.	One purpose of the statement of cash flows is to show the
relationship of net income to changes in the business's cash.

	41.	The payment of dividends to stockholders would be reported on the
statement of cash flows under:
A.	financing activities
B.	investing activities
C.	operating activities
D.	the payment of dividends would not be reported on the statement of cash flows

	42.	A transaction which does not involve cash is called a
A.	Financing activity
B.	Non-cash transaction
C.	Direct exchange transaction
D.	Both B and C
E.	None of the above

	43.	Selling treasury stock would be reported on the statement of cash flows under:
A.	operating activities
B.	investing activities
C.	financing activities
D.	the sale of treasury stock would not be reported on the statement of cash flows

	44.	The largest cash inflow from operations is the collection of cash from:
A.	interest
B.	customers
C.	dividends
D.	suppliers

	45.	A statement of cash flows begins with:
A.	financing activities
B.	investing activities
C.	operating activities
D.	either b or c depending on which method is used, direct or indirect

	46.	If accounts receivable increased $15,000 during the period, and
sales totaled $135,000 for the same period, cash collections from
customers were $120,000.

	47.	The issuance of long-term debt for cash is reported on the
Statement of Cash Flows as a cash outflow from a financing activity

	48.	A decrease in merchandise inventory would:
A.	Increase the cash paid to suppliers
B.	Decrease the cash paid to suppliers
C.	Neither increase nor decrease the cash paid to suppliers
D.	Depends on which method being use (direct or indirect)
E.	None of the above

	49.	Which of the following is not a financing activity?
A.	Repayment of long-term debt
B.	Acquisition of treasury stock
C.	Cash dividends paid
D.	Payment of interest on bonds payable
E.	None of the above

	50.	Depreciation is a deduction from net income under the indirect
method of preparing the statement of cash flows.

	51.	Which statement below best describes how a direct exchange is to
be reported when preparing a Statement of Cash Flows?
A.	Since direct exchanges do not affect cash, they are not reported.
B.	Direct exchanges are to be reported in the operating activities
section of the Statement of Cash Flows.
C.	Direct exchanges may be reported either on the face of the
statement, in the notes to the statement, or in a separate schedule.
D.	Since direct exchanges do not affect cash, they are to be reported
in the notes to the statement or on a separate schedule.
E.	None of the above

	52.	Direct exchanges result in either a cash inflow or a cash outflow
and are therefore reported on the statement of cash flows.

	53.	The net cash flow from operating activities must always exceed
the amount of net income.

	54.	A statement of cash flows has been prepared.  The sum of the
three major components (operating activities, investing activities,
financing activities) will add up to an amount equal to
A.	The ending cash balance.  
B.	Net income for the period.  
C.	To ending working capital.  
D.	The change in the cash account during the year.
E.	None of the above

	55.	Transactions in another company's own stocks or bonds are
classified on the statement of cash flows as a(n):
A.	Financing activity (outflow)
B.	Investing activity (outflow)
C.	Financing activity (inflow)
D.	Direct exchange
E.	None of the above

	56.	Before the Statement of Cash Flows was required for financial
reporting, which financial statement was used by accountants to report
financing and investing activities of the firm?
A.	Income statement
B.	Retained earnings statement
C.	Balance Sheet
D.	Statement of changes in financial position
E.	None of the above

	57.	Non-cash investing and financing activities are reported in:
A.	the financing activities section of the statement of cash flows
B.	the investing activities section of the statement of cash flows
C.	both a and b are correct
D.	an accompanying schedule

	58.	The declaration and payment of a cash dividend is an operating activity.

	59.	The statement of cash flows helps investors
A.	predict an organization's future performance.
B.	determine if a firm is in a strong position to grow.
C.	determine if the firm is in danger of insolvency.
D.	reconcile a company's income with its net cash flow.
E.	All of the above

	60.	All of the following might appear on a direct method statement of
cash flows except:
A.	payment of dividends
B.	loss on sale of plant assets
C.	interest received on loan
D.	collections from customers

	61.	Which of the following expenses are omitted from the operating
section of the cash flow statement when using the direct method?
A.	Amortization expense
B.	Salary expense
C.	Income tax expense
D.	Depreciation expense
E.	A and D only

	62.	Condor Industries prepares its statement of cash flows using the
direct method.  Condor sold equipment with a book value of $6,500 at a
gain of $1,200.  The amount to be reported on the statement of cash
flows under "proceeds from sale of plant assets" is:
A.	$7,700
B.	$6,500
C.	$5,300
D.	cannot be determined from the information given

	63.	The Boynton Company had cost of goods sold during the year just
ended of $180.  During the year, accounts receivable increased by $12
while accounts payable and inventory both increased by $16.  What
amount of cash was paid for purchases during the year?
A.	$152
B.	$164
C.	$180
D.	$196
E.	None of the above

	64.	On an indirect method statement of cash flows, a loss on the sale
of plant assets would be:
A.	deducted from net income
B.	added to net income
C.	reflected in the investing activities section
D.	ignored, since it did not use up any cash

	65.	Salaries payable at June 30, 19X5 was $45,690 and at June 30,
19X6 was $53,420.  If the income statement reported salaries expense
of $319,640 for the year ended June 30, 19X5, the cash payments to
employees during the same time period would be:
A.	$311,910
B.	$327,370
C.	$319,640
D.	cannot be determined from the information given

	66.	Sable Company's inventory account decreased $37,500 and its
accounts payable account (which relates to the purchase of merchandise
only) decreased $13,760 during the year.  Sable also reported sales of
$856,000 and cost of goods sold of $597,600 during the same period. 
Sable's payments to suppliers for inventory during the year were:
A.	$621,340
B.	$573,860
C.	$648,860
D.	$805,740

	67.	On a statement of cash flows, the amount of depreciation expense
for a  period would be:
A.	added back to other operating costs (if using the direct method)
B.	subtracted from reported net income (if using the direct method)
C.	ignored (if not reporting the operating section on the statement)
D.	added back to the reported net income (if using the indirect method)
E.	None of the above

	68.	The Delray Tire Store had total accrual basis sales this period
of $850.  During the period, accounts receivable increased by $30 and
inventory decreased by $15.  What was the amount of cash collected
from customers during the period?
A.	$880
B.	$865
C.	$895
D.	$820
E.	None of the above

	69.	Martini Company reported interest revenue of $29,450 and its
interest receivable account decreased $2,600 during the same period. 
Interest received for the period amounted to:
A.	$26,850
B.	$29,450
C.	$32,050
D.	cannot be determined from the information given

	70.	Sonny Record Company had beginning plant assets, net of
depreciation, of $427,500 and an ending net amount of $579,300.  The
income statement reported depreciation expense of $38,700 for the
year.  Sonny acquired $275,000 of plant assets during the year and
reported proceeds from the sale of plant assets of $89,200 for the
year.  The gain or loss resulting from the sale of plant assets was:
A.	$2,390 loss
B.	$3,400 loss
C.	$4,700 gain
D.	$5,050 gain

	71.	The collection of cash from an account receivable is an operating activity.

	72.	The statement of cash flows
A.	must be prepared on a daily basis.
B.	summarizes the operating, financing, and investing activities of an entity.
C.	is another name for the income statement.
D.	is a special section of the income statement.

	73.	All of the following might appear as adjustments to net income on
an indirect method statement of cash flows except:
A.	depreciation expense
B.	payment of dividends
C.	gain on sale of plant assets
D.	increase in accounts receivable

	74.	The statement of cash flows is used by:
A.	Managers
B.	Investors
C.	Creditors
D.	Financial analysts
E.	All of the above

	75.	An increase in inventory is deducted from net income in preparing
the statement of cash flows under the indirect method.

	76.	The direct method of preparing the statement of cash flows lists
cash receipts from specific operating activities and cash payments for
each major operating activity.

	77.	Either the direct method or the indirect method may be used when
preparing the operating activities section of the statement of cash
flows.

	78.	Nicholas Enterprises began the year with $486,700 in the
investments account.  During the year, Nicholas sold investments for
$185,000 cash, resulting in a $22,500 gain.  The investments account
showed a year end balance of $511,700.  The investments purchased
during the year totaled:
A.	$187,500
B.	$210,000
C.	$160,000
D.	$137,500

	79.	The primary purpose of a Statement of Cash Flows is to:
A.	Give a more accurate picture of profitability than that shown on
the Income Statement.
B.	Present the cash flow per share of common stock.
C.	Determine what net income would have been if the firm had used cash
basis accounting.
D.	Provide information about the receipts and outflows of cash during the period.
E.	None of the above

	80.	Activities that create revenues and expenses are referred to as:
A.	operating activities
B.	investing activities
C.	financing activities
D.	non-cash investing and financing activities

	81.	Retained earnings at the end of the year totaled $358,000. 
During the year, the company incurred a loss of $148,600, declared
stock dividends of $85,000, and paid cash dividends of $40,000.  If
the dividends payable account increased $15,000 during the year, the
beginning balance of the retained earnings account was:
A.	$646,600
B.	$366,600
C.	$631,600
D.	$381,600

	82.	The Statement of Cash Flows is designed to report 
A.	how the previous period's income statement relates to the current
period's income statement.
B.	only the sources and uses of cash during the current period.
C.	the operating, financing and investing activities of the firm
during the current period.
D.	the effects of the current period's income statement on the current
period's balance sheet.

	83.	An increase in a prepaid expense account would:
A.	Increase the net cash flow provided by operating activities
B.	Decrease the net cash flow provided by operating activities
C.	Increase the net cash flow provided by investing activities
D.	A or C ,depending on whether the direct or indirect method were being employed
E.	None of the above

	84.	The Dengler Company's cash and cash equivalent accounts increased
by $8,000. Cash provided by operating activities was $60,000. Net cash
used by financing activities was $55,000. Based on this information,
the cash from investing activities would net to be
A.	$13,000 decrease in cash.
B.	$ 3,000 increase in cash.
C.	$13,000 increase in cash.
D.	$ 3,000 decrease in cash.
E.	$ 8,000 increase in cash.

	85.	The treasury stock account began the year with a balance of
$45,000 and ended the year with a balance of $72,500.  During the
year, $57,000 of treasury stock was purchased.  If the treasury stock
sold during the year resulted in a credit to the paid-in capital -
treasury stock account for $1,800, then the proceeds from the sale of
treasury stock amounted to:
A.	$29,500
B.	$27,700
C.	$27,500
D.	$31,300

	86.	An increase in merchandise inventory would
A.	increase the cash provided by operations.
B.	decrease the cash provided by operations.
C.	increase the cash provided by financing activities.
D.	decrease the cash provided by financing activities.
E.	increase the cash provided by investing activities.

	87.	What effect does the following journal entry have on the amount
of cash generated by operating activities?
			Depreciation Expense 		  9,200  
			    Accumulated Depreciation  	  9,200 
A.	increases it 
B.	decreases it 
C.	has no effect 
D.	cannot be determined from the information given

	88.	Bluejay Enterprises uses the direct method in preparing its
statement of cash flows.  Bluejay sold machinery with a book value of
$34,800 at a loss of $7,300.  The amount to be reported on the
statement of cash flows under "proceeds from sale of plant assets" is:
A.	$42,100
B.	$27,500
C.	$34,800
D.	cannot be determined from the information given

	89.	The issuance of long-term debt is reported on a statement of cash
flows.as a(n):
A.	Financing activity (inflow)
B.	Investing activity (inflow)
C.	Financing activity (outflow)
D.	Direct exchange
E.	None of the above

	90.	A decrease in merchandise inventory would:
A.	Increase the cash provided by operating activities (direct method)
B.	Decrease the cash provided by operating activities (indirect method)
C.	Increase the cash provided by operating activities (indirect method)
D.	A and C only
E.	None of the above

	91.	Making a loan to another company would be reported on the
statement of cash flows under:
A.	operating activities
B.	financing activities
C.	investing activities
D.	non-cash investing and financing activities

	92.	Which of the following might appear on a direct method statement
of cash flows?
A.	depreciation expense
B.	payments to suppliers
C.	gain on sale of plant assets
D.	credit sales

	93.	Direct exchanges (non-cash) should be disclosed:
A.	In the body of the statement of cash flows
B.	In a footnote to the statement of cash flows
C.	In a separate schedule accompanying the statement
D.	Should not be disclosed
E.	None of the above

	94.	Identify the operating activity below.
A.	Sale of productive assets
B.	Payment of dividends
C.	Acquisition of inventory
D.	Repayment of principal on bonds payable
E.	None of the above

	95.	Dividend payments are reported in the operating activities
section of the statement of cash flows.

	96.	If the cash collections from customers amounted to $634,800, and
the accounts receivable account decreased $19,400 during the same
period, sales for the period were:
A.	$654,200
B.	$615,400
C.	$634,800
D.	cannot be determined from the information given

	97.	Which of the following might appear on an indirect method
statement of cash flows?
A.	payments to suppliers
B.	collections from customers
C.	credit sales 
D.	depreciation expense

	98.	Direct exchanges result in either a cash inflow or a cash outflow.

	99.	Which of the following is NOT a reason for preparing and /or
evaluating a company's Statement of Cash Flows?
A.	To assess the company's net income.
B.	To assess the company's ability to generate cash flow.
C.	To assess the company's ability to meet its future obligations.
D.	To assess the company's need for external financing.
E.	All of the above are good reasons for preparing and/or evaluating
the Statement of Cash Flows.

	100.	Depreciation is a source of cash

	101.	On an indirect method statement of cash flows, depreciation expense would be:
A.	ignored, since it is a non-cash expense
B.	deducted from net income
C.	added to net income
D.	netted against any gain from the sale of plant assets

	102.	If interest received amounted to $45,700 for the year, and the
interest receivable account began the year with a balance of $3,250
and ended the year with a balance of $5,400, the interest revenue
reported on the income statement for the year was:
A.	$47,850
B.	$43,550
C.	$48,950
D.	$40,300

	103.	The reissue of treasury stock is an investing activity

	104.	Alexander Company reported insurance expense for the year ended
October 31, 19X6 of $37,490.  During that same time period, the
prepaid insurance account decreased $4,610.  The payments for
insurance during the year ended October 31, 19X6 were:
A.	$37,490
B.	$46,710
C.	$42,100
D.	$32,880

	105.	The statement of cash flows helps managers determine:
A.	What their organization can afford
B.	dividend policy
C.	borrowing requirements
D.	investment ability
E.	All of the above

	106.	All of the following would be reported in the financing
activities section of a direct method statement of cash flows except:
A.	issuing common stock
B.	issuing a stock dividend
C.	purchasing treasury stock
D.	paying a cash dividend

	107.	Salaries expense on the income statement was $264,780 for the
year ended December 31, 19X6.  The salaries payable account decreased
$24,370 during the same time period.  The amount of cash payments to
employees that should be reported on the direct method statement of
cash flows for the year ended December 31, 19X6 is:
A.	$289,150
B.	$240,410
C.	$264,780
D.	cannot be determined from the information given

	108.	To be classified as a cash equivalent, the non-cash asset must be:
A.	Highly liquid
B.	Easily converted into a known amount of cash
C.	Near their maturity date
D.	All of the above
E.	only A and B of the above

	109.	Another name for the indirect method of preparing the statement
of cash flows is the:
A.	income method
B.	cash equivalent method
C.	non-cash method
D.	reconciliation method

	110.	From the following information, determine the amount of cash
received from customers during 19x1.
	Accounts Receivable  (  1/ 1/19x1 )		$21,000
	Accounts Receivable  ( 12/31/19x1 )	  18,000
	Cost of Goods Sold		( 19x1 )		  60,000
	Sales				( 19x1 )		  90,000

A.	$57,000
B.	$63,000
C.	$87,000
D.	$93,000
E.	None of the above

	111.	Prepaid insurance began the year with a $6,700 balance and ended
the year with an $8,320 balance.  The income statement for the year
reported insurance expense of $49,310.  Payments for insurance during
the year amounted to:
A.	$50,930 
B.	$49,310
C.	$47,690
D.	$57,630

	112.	Taylor Inc. sold equipment with a book value of $20,000 for
$24,000 cash. The equipment was originally purchased for $26,000.
Depreciation expense for 19x3 was $3,000. Based on this information,
the investing activities section of the cash flow statement would show
cash of _______________ during 19x3.
A.	$20,000 provided
B.	$26,000 used
C.	$24,000 provided
D.	$21,000 provided
E.	$30,000 provided

	113.	Elway Enterprises reports the following information at year-end 19B.
		Beginning Accounts Receivable		$ 85
		Ending Accounts Receivable		   92
		Sales Revenue  		 			 205
		Beginning Cash balance 			   60
Determine the cash received from customers during 19B.
A.	$138
C.	$198
B.	$152
D.	$212
E.	None of the above

	114.	On an indirect method statement of cash flows, an increase in
accounts payable would be:
A.	added to net income
B.	deducted from net income
C.	netted against any decreases in accounts receivable
D.	reflected in the investing activities section

	115.	The operating activities section of an indirect method statement
of cash flows begins with:
A.	collections from customers
B.	payments to suppliers
C.	net income
D.	the beginning balance of cash

	116.	A stock dividend is not reported on a Statement of Cash Flows

	117.	The issuance of bonds would be reported on the statement of cash flows under:
A.	operating activities
B.	financing activities
C.	investing activities
D.	non-cash investing and financing activities

	118.	A company reporting net income will always show an increase in
cash for the same period.

	119.	Which of the following is a FALSE statement concerning the
Statement of Cash Flows?
A.	Either the direct method or indirect method may be used.  
B.	Depreciation expense results in an inflow of cash.  
C.	Receipt of interest payments is an operating activity.  
D.	Direct exchanges should be reported on a separate schedule.

	120.	Decreases in prepaid expenses require cash payments.

	121.	
	122.	All of the following might appear on an indirect method
statement of cash flows except:
A.	loss on sale of plant assets
B.	depreciation expense
C.	interest received on notes receivable
D.	decrease in inventory

	123.	The direct method of preparing the statement of cash flows:
A.	reports where cash came from and how it was spent on operating activities
B.	is preferred by FASB
C.	is easier for companies to compute
D.	both a and b are correct

	124.	Distribution of a stock dividend is usually shown on which
reporting format (or method) of the Statement of Cash Flows?
			  Direct 	       Indirect
A.	   yes   		   yes 
B.	   yes  		     no 
C.	   no   		   yes 
D.	   no   		    no

	125.	Highly liquid short-term investments that can be converted into
cash with little delay are called:
A.	prepaids
B.	notes receivable
C.	unearned investments
D.	cash equivalents

	126.	The direct method statement of cash flows for the year ended
January 31, 19X6 reported payments to employees of $461,930.  The
beginning balance and the ending balance in the salaries payable
account for that same period were $21,670 and $35,490, respectively. 
The salaries expense reported on the income statement for the year
ended January 31, 19X6 was:
A.	$448,110
B.	$475,750
C.	$461,930
D.	cannot be determined from the information given

	127.	Mary Ann's Candy Shop reported net income of $57,000 during
19x3. A prepaid expense increased by $2,000, accounts payable
decreased by $3,000, and depreciation expense was $4,000. What amount
would be reported as net cash flows from operating activities?
A.	$61,000
B.	$60,000
C.	$56,000
D.	$66,000
E.	$62,000

	128.	Topaz Company's inventory account increased $24,800 and its
accounts payable account (which relates to the purchase of merchandise
only) decreased $17,240 during the year.  Topaz also reported sales of
$689,500 and cost of goods sold of $432,700 during the same period. 
Topaz Company's payments to suppliers for inventory during the year
were:
A.	$256,800
B.	$425,140
C.	$474,740
D.	$390,660

	129.	Because the Delray Company is having a difficult time meeting
its financial obligations, the firm has applied for a two year loan. 
Which financial statement would be most helpful in projecting whether
future operations will generate enough funds to pay back the loan?
A.	statement of cash flows 
B.	balance sheet 
C.	retained earnings statement 
D.	income statement

	130.	The exchange of stock for land would be reported on the
statement of cash flows under:
A.	investing activities
B.	financing activities
C.	non-cash investing and financing activities
D.	exchanges are not reported on the statement of cash flows

	131.	Which of the following expenses are not omitted from the
operating activities section of the statement of cash flows when using
the direct method?
A.	Depreciation expense
B.	Amortization expense
C.	Loss on sale of investment
D.	Rent expense
E.	None of the above

	132.	Collections on a loan are reported as an investing activity on
the statement of cash flows.

	133.	The indirect method of preparing the statement of cash flows is
easier to understand, it provides more information for decision
making, and the FASB prefers it.

	134.	"Collections from customers," listed on a direct method
statement of cash flows, includes:
A.	cash sales
B.	collections of accounts receivable from credit sales
C.	both a and b are correct
D.	all sales on account during the period

	135.	Patton Park Amusements reports beginning plant assets, net of
depreciation, of $645,000 and an ending amount of $732,500.  The
income statement shows depreciation of $48,300 and a $5,600 loss on
sale of plant assets.  Patton Park acquired $213,000 of plant assets
during the year.  The proceeds from the sale of plant assets are:
A.	$125,500
B.	$71,600
C.	$82,800
D.	$77,200

	136.	What effect does the following journal entry have on the amount
of cash generated by financing activities?
				Dividends Paid  7,500 
				    Cash   			 7,500 
A.	increases it 
B.	decreases it 
C.	has no effect 
D.	the journal entry above does not relate to financing activities

	137.	Cash from financing activities will increase if a company:
A.	Has a 3 for 1 stock split.
B.	Pays a cash dividend.
C.	Exchanges 3,000 shares of preferred stock for 10 acres of land.
D.	Sells treasury stock at below cost.
E.	None of the above

	138.	Investors analyze the statement of cash flows to determine:
A.	total interest earned during the period
B.	which companies are reporting unearned revenue 
C.	the debt-to-equity ratio
D.	which businesses are expanding and which are cutting back

	139.	The payment of interest is reported on a statement of cash flows as a(n):
A.	Financing activity (outflow)
B.	Investing activity (inflow)
C.	Financing activity (inflow)
D.	Operating activity (outflow)
E.	None of the above

	140.	Accruing interest revenue on notes receivable at year end would
______ the "interest received on notes receivable" reported on a
direct method statement of cash flows.
A.	have no effect on
B.	increase
C.	decrease
D.	either b or c depending upon which account is credited

	141.	The Lantana Corporation exchanged 2,200 share of $4 par value
common stock for a building ( fair value was $9,000 and cost to the
original owner was $5,000).  This transaction is:
A.	An operating activity
B.	A source of cash
C.	Both an investing activity and an operating activity.
D.	Both a financing activity and an operating activity
E.	None of the above

	142.	A decrease in the asset prepaid expenses would
A.	increase the cash provided by operations.
B.	decrease the cash provided by operations.
C.	increase the cash provided by financing activities.
D.	decrease the cash provided by financing activities.
E.	decrease the cash provided by investing activities.

	143.	Which of the following financial statements is not required by
the FASB for external reporting?
A.	Balance sheet
B.	Income statement
C.	Statement of cash flows
D.	Statement of change in financial position
E.	All of these statements are required

	144.	Declaration and payment of a cash dividend is an operating activity.

	145..	Net cash disbursements are deducted from net cash receipts when
using which of the following methods to prepare the statement of cash
flows
A.	Operating (direct method)
B.	Operating (indirect method)
C.	Reconciliation
D.	A and B only
E.	None of the above

	146.	The indirect method of preparing the statement of cash flows:
A.	is preferred by FASB
B.	is easier for companies to compute
C.	reports the detailed operating cash flows
D.	produces a different amount for cash flows from operating
activities than the direct method

	147.	A change in which one of the following investments should be
reported on the Statement of Cash Flows?
A.	Treasury bills
B.	Common Stock
C.	Commercial paper
D.	Money market funds
E.	None of the above