Chapter 23 Quiz

Chapter 23 Quiz - 1. Matching - Effects of transactions on...

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1. Matching - Effects of transactions on statement of cash flows. Any given transaction may affect a statement of cash flows (using the indirect method) in one or more of the following ways: Instructions: For each transaction listed below, list the letter or letters from above that describe(s) the effect of the transaction on a statement of cash flows for the year ending December 31, 2011. Ignore any income tax effects. A. Cash flows from operating activities : Net income will be increased or adjusted upward. B. Cash flows from operating activities : Net income will be decreased or adjusted downward. C. Cash flows from investing activities : Increase as a result of cash inflows. D. Cash flows from investing activities : Decrease as a result of cash outflows. E. Cash flows from financing activities : Increase as a result of cash inflows. F. Cash flows from financing activities : Decrease as a result of cash outflows. G. The statement of cash flows is not affected : Not required to be reported in the body of the statement.
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Preferred stock with a carrying value of $44,000 was redeemed for $50,000 on January 1, 2011. Accounts receivable increased $4,400. Machinery which originally cost $3,000 and has a book value of $1,800 is sold for $1,400 on December 31, 2011. (other than option C) Land is acquired through the issuance of bonds payable on July 1, 2011. 1,000 shares of stock, stated value $10 per share, are issued for $25 per share in 2011. Amortization of patents totaled $3,000. A cash dividend of $8,000 is paid on December 31, 2011. The purchase of treasury stock for $18,000. Points Earned: 7.0/8.0 Correct Answer(s): Cash flows from financing activities : Decrease as a result of cash outflows. : Preferred stock with a carrying value of $44,000 was redeemed for $50,000 on January 1, 2011., Cash flows from operating activities : Net income will be decreased or adjusted downward. : Accounts receivable increased $4,400., Cash flows from operating activities : Net income will be increased or adjusted upward. : Machinery which originally cost $3,000 and has a book value of $1,800 is sold for
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Chapter 23 Quiz - 1. Matching - Effects of transactions on...

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