ACCS Review Exam with Accurate
Answers
A company had net income of $230,000. Depreciation expense is $26,000. During the year
accounts receivable and inventory increased $15,000 and $40,000, respectively. Prepaid
expenses and accounts payable decreased $2,000 and $4,000, respectively. There was also a
loss on the sale of equipment of $3,000. Using the indirect method, what is the amount of net
cash flows from operating activities on the statement of cash flows? - ✔✔230,000+26,000-
15,000-40,000+2,000-4,000+3,000 =202,000
The net income reported on the income statement for the current year was $100,000.
Depreciation recorded on plant assets was $25,000. Accounts receivable and inventories
decreased by $5,000 and $15,000, respectively. Prepaid expenses and accounts payable
increased by $500 and $4,000, respectively. Using the indirect method, how much would be
reported for net cash flows from operating activities in the statement of cash flows? -
✔✔100,000+25,000+5,000+15,000-5,000+4,000 =148500
Financing activities activities involve - ✔✔insurance of stock
Which balance sheet accounts are affected by financing activities? - ✔✔Long term liabilities →
this is why we didn't include long term liabilities in #2
In calculating net cash from operating activities using the indirect method, depreciation
expense is? - ✔✔added to net income
Which of the following would be added to net income using the indirect method? - ✔✔loss on
sale of equipment
Issued long-term debt - ✔✔Financing Activity, Source of Cash
, Payment of cash dividends - ✔✔financing activity, use of cash
Purchased land for cash - ✔✔Investing Activity, Use of Cash
issued common stock for cash - ✔✔Financing Activity, Source of Cash
decrease in accounts payable during a period - ✔✔Deducted from net income--Operating
activities
Declaration and payment of cash dividend - ✔✔Cash outflow--financing activity
Loss on sale of land; - ✔✔Added to net income-Operating activities
decrease in accounts receivable during a period - ✔✔Added to net income-Operating activities
redemption of bonds for cash - ✔✔Cash outflow--financing activity
proceeds from sale of equipment at book value - ✔✔Cash inflow--investing activity
insurance of common stock for cash - ✔✔cash inflow -- financing activity
purchase of a building for cash - ✔✔Cash outflow--investing activity
increase in merchandise inventory during a period - ✔✔Deducted from net income--Operating
activities
depreciation is always ______ to net income - ✔✔added
Answers
A company had net income of $230,000. Depreciation expense is $26,000. During the year
accounts receivable and inventory increased $15,000 and $40,000, respectively. Prepaid
expenses and accounts payable decreased $2,000 and $4,000, respectively. There was also a
loss on the sale of equipment of $3,000. Using the indirect method, what is the amount of net
cash flows from operating activities on the statement of cash flows? - ✔✔230,000+26,000-
15,000-40,000+2,000-4,000+3,000 =202,000
The net income reported on the income statement for the current year was $100,000.
Depreciation recorded on plant assets was $25,000. Accounts receivable and inventories
decreased by $5,000 and $15,000, respectively. Prepaid expenses and accounts payable
increased by $500 and $4,000, respectively. Using the indirect method, how much would be
reported for net cash flows from operating activities in the statement of cash flows? -
✔✔100,000+25,000+5,000+15,000-5,000+4,000 =148500
Financing activities activities involve - ✔✔insurance of stock
Which balance sheet accounts are affected by financing activities? - ✔✔Long term liabilities →
this is why we didn't include long term liabilities in #2
In calculating net cash from operating activities using the indirect method, depreciation
expense is? - ✔✔added to net income
Which of the following would be added to net income using the indirect method? - ✔✔loss on
sale of equipment
Issued long-term debt - ✔✔Financing Activity, Source of Cash
, Payment of cash dividends - ✔✔financing activity, use of cash
Purchased land for cash - ✔✔Investing Activity, Use of Cash
issued common stock for cash - ✔✔Financing Activity, Source of Cash
decrease in accounts payable during a period - ✔✔Deducted from net income--Operating
activities
Declaration and payment of cash dividend - ✔✔Cash outflow--financing activity
Loss on sale of land; - ✔✔Added to net income-Operating activities
decrease in accounts receivable during a period - ✔✔Added to net income-Operating activities
redemption of bonds for cash - ✔✔Cash outflow--financing activity
proceeds from sale of equipment at book value - ✔✔Cash inflow--investing activity
insurance of common stock for cash - ✔✔cash inflow -- financing activity
purchase of a building for cash - ✔✔Cash outflow--investing activity
increase in merchandise inventory during a period - ✔✔Deducted from net income--Operating
activities
depreciation is always ______ to net income - ✔✔added
