Accounting Chapter 16,18 Exam – Flashcards
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Statement for cash flows
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A financial statement that reports the cash inflows and cash outflows for an accounting period, and that classifies those cash flows as operating activities, investing activities, or financing activities
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Operating activities
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Activities that involve the production or purchase of merchandise and the sale of goods and services to customers, including expenditures related to administering the business, are classified as
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Investing Activities
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the appropriate section in the statement of cash flows for reporting the purchase of equipment for cash
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Payment of a cash dividend
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Which of the following items is reported on the statement of cash flows under financing activities?
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Investing activities include
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-Purchase of plant assets
- lending and collecting on notes receivable
- Sale of short-term investments other than cash equivalents
-Sale of plant assets
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Operating activities
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The appropriate section in the statement of cash flows for reporting the cash payment of wage is:
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Financing Activities
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The appropriate section in the statement of cash flows for reporting the issuance of common stock for cash is
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Receipts of cash sales
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Which one of the following is representative of typical cash flows from operating activities?
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Purchase of treasury stock
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which of the following in the cash flows from financing activities section of the statement of cash flows?
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Full disclosure principle
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The accounting principle that requires important noncash financing and investing activities be reported on the statement of cash flows or in a footnote is
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Schedule of noncash investing or financing activity
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The appropriate section in the statement of cash flows for reporting the purchase of land in exchange for common stock is
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A note in the financial statements or a schedule attached to the statement of cash flows
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Noncash investing and financing activities may be disclosed in:
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Reports net income and then adjusts it for items necessary to determine net cash provided or used by operating activities
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The indirect method for the preparation of the operating activities section of the statement of cash flows
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-Gains and losses from non-operating items
-Revenues and expenses that did not provide or use cash
- Changes in noncash current assets and current liabilities related to operating activities
-Changes in current liabilities related to operating activities
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When using the indirect method to calculate and report the net cash provided or used by operating activities, net income is adjusted for
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Decrease in incomes taxes payable
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When using the indirect method to calculate and report net cash provided or used by operating activities, which of the following is subtracted from net income?
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A loss on the sale of land should be added to net income in the operating activities section
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When preparing a statement of cash flows on the indirect method, which of the following is correct?
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In financing activities as a use of funds
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Becker Corporation paid cash dividends totaling $85,000 during it's most recent fiscal year. How should this information be reported on Becker's statement of cash flows?
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Identifying fixed cost and variable cost
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Classifying costs by behavior involves
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Contains a combination of fixed costs and variable costs
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A mixed cost:
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Does not change with changes in the volume of activity within the relevant range
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A fixed cost
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Unit Variable Cost:: remains constant
United Fix cost:: decreases
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Last year, Smith Company sold 10,000 units of its only product. If sales increase by 15% in the current year, how will unit variable cost and unit fixed cost be affected?
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Finished goods inventory
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Products that have been completed and are ready to be sold by the manufacturer are
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Goods in process inventory
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Products that are in the process of being manufactured but are not yet complete are called
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Work in process inventory
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Another title for goods in process inventory is
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-Indirect material cost
-Machinery oil
-Factory rent
-Selling costs are period costs
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Factory overhead costs normally include all of the following
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Direct Labor
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Labor costs that are clearly associated with specific units or batches of product because the labor is used to convert raw materials into finished products called are:
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Factory overhead
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Costs that are incurred as part of the manufacturing process but are not clearly associated with specific units or products or batches of production, including all manufacturing costs other than direct material and direct labor costs, are called:
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Indirect labor
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The salary paid to the supervisor of an assembly line would normally be classified as
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-Direct materials,
- Direct labor
-Factory overhead
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The three major cost components of a manufactured product are
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Factory rent is a product cost and advertising expense is a period cost
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Which of the following statements is true regarding product and period costs?
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+Direct materials used
+Direct Labor
+ Factory overhead
+beginning goods in process
- Ending goods in process
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Which of the following represents the correct formula for calculating cost of goods manufactured?
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Reported as a source of cash under cash flows from investing activities: 60,000
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A machine with a cost of $130,000 and accumulated depreciation of of $85,000 is sold for $60,000 cash.
