ACCT110: final UPDATED ACTUAL Exam
Questions and CORRECT Answers
A statement of cash flows - CORRECT ANSWER - • is a basic financial statement
required for publicly-held companies
The statement of cash flows - CORRECT ANSWER - • summarizes the operating,
financing, and investing activities of an entity
If a company reports a net loss, it - CORRECT ANSWER - • may still have an increase in
cash
The statement of cash flows will not report - CORRECT ANSWER - • the number of
checks not written at the end of the period
Creditors analyze the statement of cash flows to determine - CORRECT ANSWER -•
whether or not the company can pay interest on debt
Considered to be a cash equivalent - CORRECT ANSWER - • investments in short-term
U.S. Government securities
Cash received from the issuance of bonds would be reported on a statement of cash flows under -
CORRECT ANSWER - • financing activities
The receipt of interest (vs. the payment of interest) on loans would be reported on a statement of
cash flows under - CORRECT ANSWER - • operating activities
In 2012, Simply Simple, Inc. sold land for $150,000 cash, purchased equipment for $30,000 cash
and issued bonds for $100,000 cash. The net cash provided by investing activities is -
CORRECT ANSWER - • $120,000
, Text Support, Inc. issued common stock for $470,000 cash in 2012. The company paid cash
dividends of $50,000 and purchased treasury stock at a cost of $20,000. The financing section of
the statement of cash flows will report net cash inflows of - CORRECT ANSWER -•
$400,000
Categorize transaction as either operating activity, investing activity, financing activity or a
noncash activity.
Bonds payable are issued for cash at a premium. - CORRECT ANSWER - • financing
activity
Categorize transaction as either operating activity, investing activity, financing activity or a
noncash activity.
Equipment is sold for cash at book value. - CORRECT ANSWER - • investing activity
Categorize transaction as either operating activity, investing activity, financing activity or a
noncash activity.
Land is purchased by signing a 5-year, 8% note payable. - CORRECT ANSWER - • non-
cash activity
Categorize transaction as either operating activity, investing activity, financing activity or a
noncash activity.
1,000 shares of ABC Corporation's common stock are purchased for cash. - CORRECT
ANSWER - • investing activity
Categorize transaction as either operating activity, investing activity, financing activity or a
noncash activity.
The conversion option is utilized and bonds payable are converted into common stock. -
CORRECT ANSWER - • non-cash activity
Categorize transaction as either operating activity, investing activity, financing activity or a
noncash activity.
Questions and CORRECT Answers
A statement of cash flows - CORRECT ANSWER - • is a basic financial statement
required for publicly-held companies
The statement of cash flows - CORRECT ANSWER - • summarizes the operating,
financing, and investing activities of an entity
If a company reports a net loss, it - CORRECT ANSWER - • may still have an increase in
cash
The statement of cash flows will not report - CORRECT ANSWER - • the number of
checks not written at the end of the period
Creditors analyze the statement of cash flows to determine - CORRECT ANSWER -•
whether or not the company can pay interest on debt
Considered to be a cash equivalent - CORRECT ANSWER - • investments in short-term
U.S. Government securities
Cash received from the issuance of bonds would be reported on a statement of cash flows under -
CORRECT ANSWER - • financing activities
The receipt of interest (vs. the payment of interest) on loans would be reported on a statement of
cash flows under - CORRECT ANSWER - • operating activities
In 2012, Simply Simple, Inc. sold land for $150,000 cash, purchased equipment for $30,000 cash
and issued bonds for $100,000 cash. The net cash provided by investing activities is -
CORRECT ANSWER - • $120,000
, Text Support, Inc. issued common stock for $470,000 cash in 2012. The company paid cash
dividends of $50,000 and purchased treasury stock at a cost of $20,000. The financing section of
the statement of cash flows will report net cash inflows of - CORRECT ANSWER -•
$400,000
Categorize transaction as either operating activity, investing activity, financing activity or a
noncash activity.
Bonds payable are issued for cash at a premium. - CORRECT ANSWER - • financing
activity
Categorize transaction as either operating activity, investing activity, financing activity or a
noncash activity.
Equipment is sold for cash at book value. - CORRECT ANSWER - • investing activity
Categorize transaction as either operating activity, investing activity, financing activity or a
noncash activity.
Land is purchased by signing a 5-year, 8% note payable. - CORRECT ANSWER - • non-
cash activity
Categorize transaction as either operating activity, investing activity, financing activity or a
noncash activity.
1,000 shares of ABC Corporation's common stock are purchased for cash. - CORRECT
ANSWER - • investing activity
Categorize transaction as either operating activity, investing activity, financing activity or a
noncash activity.
The conversion option is utilized and bonds payable are converted into common stock. -
CORRECT ANSWER - • non-cash activity
Categorize transaction as either operating activity, investing activity, financing activity or a
noncash activity.
