Accounting Cash Flow MCQs (Chapterwise Multiple Choice Questions)

A cash flow statement is typically prepared _____________________.

before the balance sheet is prepared

after the balance sheet is prepared but before the income statement is prepared

after the income statement is prepared but before the balance sheet is prepared

after both the balance sheet and the income statement are prepared

Answer & Explanation

Correct Answer: after both the balance sheet and the income statement are prepared

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A payment made from accounts payable will cause cash to ______________ .

increase

decrease

show no change

The effect on cash cannot be determined based on given information.

Answer & Explanation

Correct Answer: decrease

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On a cash flow statement, depreciation expense ________________.

provides cash from operations

should be added to net income when determining cash provided by operations

should be deducted from net income when determining cash provided by operations

is an example of cash expense

Answer & Explanation

Correct Answer: should be added to net income when determining cash provided by operations

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Purchasing inventory with a check will cause cash to ______________ .

increase

decrease

show no change

The effect on cash cannot be determined based on given information.

Answer & Explanation

Correct Answer: decrease

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In 2007, XYZ Company had a net income of $312,000 and reported the following:

Decrease in accounts receivable: $10,000

Gain on sale of building: $14,000

Increase in accounts payable: $12,000

Issuance of common stock: $90,000

Retirement of debt: $45,000

Given this data, the amount of cash flow from operations was ______________.

$334,000

$322,000

$320,000

$324,000

Answer & Explanation

Correct Answer: $320,000

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Which of the following would be shown in the investing section of a cash flow statement?

Retirement of long-term debt

Retirement of preferred stock

Acquisition of treasury stock

None of the above

Answer & Explanation

Correct Answer: None of the above

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Treasury stock purchased for cash would appear in which of the following sections of the cash flow statement?

Operating section

Investing section

Financing section

It would not appear on the statement.

Answer & Explanation

Correct Answer: Financing section

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Preferred stock issued for cash would appear in which of the following sections of the cash flow statement?

Operating section

Investing section

Financing section

It would not appear on the statement.

Answer & Explanation

Correct Answer: Financing section

Note: This Question is unanswered, help us to find answer for this one

Which of the following would NOT be shown in the investing section of a cash flow statement?

Acquisition of equipment

Acquisition of a building

Proceeds from sale of equipment

All of the above are shown in the investing section of a cash flow statement

Answer & Explanation

Correct Answer: All of the above are shown in the investing section of a cash flow statement

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An amortization of a bond discount would be shown __________________.

as an add-back to net income when determining cash flow from operations

as a deduction from net income when determining cash flow from operations

in the financing section

None of the above

Answer & Explanation

Correct Answer: as an add-back to net income when determining cash flow from operations

Note: This Question is unanswered, help us to find answer for this one

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