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Quiz: Warren, Accounting 23e, Chapter 16

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The two different types of methods for reporting the cash flows from operating activities section are: a. the direct method and the net cash flow method.

b. the indirect method and the net cash flow method. 1 c. the direct method and the indirect method.

d. the operation flow method and the direct method.

status: incorrect (0.0) correct: c your answer: a feedback: Incorrect. See page 712 An example of a cash flow from investing activities is: a. receipt of cash from the sale of land.

b. receipt of cash received from the issue of bonds. 2 c. deduction of depreciation expense.

d. cash received as a dividend.

status: incorrect (0.0) correct: a your answer: c feedback: Incorrect. See page 714 An example of a cash flow from financing activities is: a. receipt of cash from the sale of land.

b. receipt of cash received from the issue of bonds.

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Quiz: Warren, Accounting 23e, Chapter 16


b. receipt of cash received from the issue of bonds. 3 c. deduction of depreciation expense.

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d. deduction for increase in accounts payable.

status: incorrect (0.0) correct: b your answer: a feedback: Incorrect. See page 714 Which one of the following would be deducted from net income in determining net cash flows from operating activities by the indirect method? a. Depreciation expense.

b. Decrease in inventories. 4 c. Decrease in accounts receivable.

d. Gain on sale of plant and equipment.

status: incorrect (0.0) correct: d your answer: a feedback: Incorrect. See pages 717-718 Which one of the following would be added to net income in determining net cash flows from operating activities by the indirect method? a. Depreciation expense.

b. Increase in inventories. 5 c. Increase in accounts receivable.

d. Decrease in income taxes payable.

status: incorrect (0.0) correct: a your answer: b feedback: Incorrect. See pages 717-718 Which one of the following would be added to net income in determining net cash flows from operating activities by the indirect method? a. Increase in accounts receivable.

b. Decrease in inventories. 6 c. Decrease in accounts payable.

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Quiz: Warren, Accounting 23e, Chapter 16


c. Decrease in accounts payable.

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d. Gain on sale of a long-term investment.

status: incorrect (0.0) correct: b your answer: a feedback: Incorrect. See pages 717-718 The formula to calculate free cash flow is: a. Cash flow from financing activities - Cash used to purchase fixed assets to maintain productive capacity used up in producing income during the period - Cash used for dividends. b. Cash flow from investing activities - Cash used to purchase fixed assets to maintain productive capacity used up in producing income during the period - Cash used for dividends. c. Cash flow from operating activities - Cash used to purchase fixed assets to maintain productive capacity used up in producing income during the period. d. Cash flow from operating activities + Cash used to purchase fixed assets to maintain productive capacity used up in producing income during the period. status: incorrect (0.0) correct: c your answer: b feedback: Incorrect. See page 730 The cost of merchandise sold during the year was $50,000. Merchandise inventories were $12,500 and $15,500 at the beginning and end of the year respectively. Accounts payable were $10,000 and $9,000 at the beginning and end of the year, respectively. Using the direct method of reporting cash flows from operating activities, cash payments for merchandise total: a. $54,000.

b. $50,000.

c. $49,000.

d. $53,000.

status: incorrect (0.0) correct: a your answer: d feedback: Incorrect. See page 727 Sales for the year were $750,000. Trade receivables were $40,000 and $50,000 at the beginning and end of the year, respectively. Cash received from customers to be reported on the cash flow statement using the direct method is: a. $700,000.

b. $710,000. 9 c. $740,000.

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Quiz: Warren, Accounting 23e, Chapter 16

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d. $760,000.

status: incorrect (0.0) correct: c your answer: b feedback: Incorrect. See page 726 Income tax was $150,000 for the year. Income tax payable was $20,000 and $30,000 at the beginning and end of the year, respectively. Cash payment for income tax reported on the cash flow statement using the direct method is: a. $140,000.

b. $150,000. 10 c. $170,000.

d. $180,000.

status: correct (1.0) correct: a your answer: a feedback: Correct.

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