Question Details

In calculating cash flows from operating activities 



1.	If accounts receivable have increased during the period,
a.	revenues on an accrual basis are less than revenues on a cash basis.
b.	revenues on an accrual basis are greater than revenues on a cash basis.
c.	revenues on an accrual basis are the same as revenues on a cash basis.
d.	expenses on an accrual basis are greater than expenses on a cash basis.

2.	If accounts payable have increased during a period,
a.	revenues on an accrual basis are less than revenues on a cash basis.
b.	expenses on an accrual basis are less than expenses on a cash basis.
c.	expenses on an accrual basis are greater than expenses on a cash basis.
d.	expenses on an accrual basis are the same as expenses on a cash basis.


	3.	Which one of the following affects cash during a period?
a.	Recording depreciation expense
b.	Declaration of a cash dividend
c.	Write-off of an uncollectible account receivable
d.	Payment of an accounts payable


	4.	In calculating cash flows from operating activities using the indirect method, a gain on the sale of equipment is
a.	added to net income.
b.	deducted from net income.
c.	ignored because it does not affect cash.
d.	not reported on a statement of cash flows.


	5.	Meyer Company reported net income of €70,000 for the year. During the year, accounts receivable increased by €7,000, accounts payable decreased by €3,000 and depreciation expense of €5,000 was recorded. Net cash provided by operating activities for the year is
a.	€65,000.
b.	€85,000.
c.	€69,000.
d.	€70,000.




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