ACC 212 Ch 12 Exam Questions with Correct Answers Latest Update 2025/2026

ACC 212 Ch 12 Exam Questions with Correct Answers Latest Update 2025/2026 Which of the following financial statements shows the major types of business activities that caused a company's cash to increase or decrease during the accounting period? - Answers Statement of cash flows Which of the following describes what is reported first within the statement of cash flows? - Answers Operating activities section Which of the following are examples of cash flows relating to operating activities? - Answers - paying rent -receiving dividends - receiving interest Which of the following are examples of cash flows relating to investing activities? - Answers -disposal of equipment -maturity of investments in securities -purchase of investments in securities Which of the following are examples of cash flows relating to financing activities? - Answers -borrowing from lenders through formal debt contracts -repaying principal to lenders Which of the following statements about the two alternative methods that may be used when preparing the statement of cash flows are true? - Answers -The net change in cash is always the same under both methods -The two alternative methods only relate to the operating activities section. Which of the following is the starting point when the indirect method is used to compute cash flows from operating activities? - Answers Net income Indirect method: depreciation - Answers added indirect method: decreases in current assets - Answers added indirect method: decreases in current liabilites - Answers subtracted indirect method: increases in current assets - Answers subtracted indirect method: increases in current liabilites - Answers added Investing cash flow? Purchase of a patent for cash - Answers investing cash outflow Investing cash flow? receipt of cash dividend - Answers not an investing activity Investing cash flow? sale of equipment for cash - Answers investing cash inflow During the year, Martin Corporation sold an investment in bonds issued by another company for $21,000. Those bonds had a cost of $20,000. Martin also purchased the common stock of another company for $10,000. Which of the following is the net cash provided by (used in) investing activities? - Answers $11,000 net cash investing= cash from sale of bonds - cash used to purchase stock financing cash flow? cash received from stockholders for issuance of new stock - Answers financing cash inflow financing cash flow? cash payment of interest on long-term notes - Answers not a financing activity financing cash flow? payment of cash dividends - Answers financing cash outflow During the year, Cameron Corporation issued shares of its common stock for cash of $800,000 and paid $300,000 in cash dividends. In addition, Cameron issued $100,000 of bonds at face value. Which of the following is the net cash provided by (used in) financing activities? - Answers $600,000 net cash finance= cash from sale of stock - cash used to pay dividends + cash from issuance of bonds Which of the following is the term used to describe the excess of cash flows from operations over the amount of cash outflows used to replace property, plant, and equipment and to fund financing outflows of cash for dividends to stockholders? - Answers free cash flow Which of the following are causes of deviations in cash flows from operating activities? - Answers -changes in working capital management