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51 the first step in theprocedure for preparing the statement of cash flows using a 4297666

 

 

51. The first step in theprocedure for preparing the statement of cash flows using a T-account work sheet is to 
A. obtain a balance sheet for the beginning of the period of the statement of cash flows.
B. obtain a balance sheet for the ending of the period spanned by the statement of cash flows.
C. obtain a balance sheet for the beginning and the end of the period spanned by the statement of cash flows.
D. obtain an income statement for the beginning of the period of the statement of cash flows.
E. obtain an income statement for the end of the period of the statement of cash flows.

 

52. In theprocedure for preparing the statement of cash flows using a T-account work sheet, a master T-account for _____ appears at the top of the work sheet. 
A. cash
B. working capital
C. financing
D. operations
E. net income

 

53. In preparing a T-account work sheet, a master T-account for cash appears at the top of the work sheet. This master T-account has three sections, labeled 
A. Operations, Investing, and Financing.
B. Working Capital, Investing, and Financing.
C. Operations, Working Capital, and Financing
D. Operations, Working Capital, and Investing
E. Operations, Exchanges, and Investing

 

54. The beginning and the ending balances in cash and cash equivalents are entered in the master T-account for preparing the statement of cash flows. Cash equivalents represent _____ in which a firm has temporarily placed excess cash. 
A. short-term, highly illiquid investments
B. short-term, highly liquid investments
C. short-term and long-term, highly liquid investments
D. short-term and long-term, highly illiquid investments
E. short-term and long-term, marketable securities

 

55. Generally only investments with maturities of _____ months or less qualify as cash equivalents. 
A. one
B. two
C. three
D. six
E. twelve

 

56. The term cash flows refers to changes in 
A. cash, only
B. cash and cash equivalents.
C. working capital
D. cash and marketable securities
E. funds

 

57. The second step of completing the T-account work sheet for generating the statement of cash flows is to prepare a T-account for each balance sheet account other than _____ and enter the beginning and the ending balances. 
A. cash and cash equivalents
B. working capital
C. cash, only
D. cash and marketable securities
E. exchanges

 

58. In order to explain the change in the master cash account between the beginning and the end of the period, the accountant reconstructs the entries originally made in the accounts during the period and enters them in appropriate T-accounts on the T-account work sheet. By explaining the changes in balance sheet accounts other than cash, this process also explains the change in 
A. cash and cash equivalents.
B. cash, only
C. working capital
D. cash and marketable securities
E. funds.

 

59. In preparing the statement of cash flows for Year 5, internal records indicate that depreciation on manufacturing facilities totaled $500 and on selling and administrative facilities totaled $300 during the year. The firm included these amounts in cost of goods sold and selling and administrative expenses, respectively, in the income statement for Year 5. None of this $800 of depreciation required an operating cash flow during Year 5. The firm reported cash expenditures for these assets as investing activities in the earlier periods when it acquired them. The T-account work sheet entry to explain the change in the Accumulated Depreciation account. 
A. adds back depreciation to net income in deriving cash flow from operations.
B. subtracts depreciation from net income in deriving cash flow from operations.
C. adds back depreciation on the selling and administrative facilities, only, to net income in deriving cash flow from operations.
D. subtracts depreciation on the selling and administrative facilities, only, from net income in deriving cash flow from operations.
E. none of the above

 

60. In preparing the statement of cash flows for Year 4, internal records indicate that depreciation on manufacturing facilities totaled $800. The firm included this amount in cost of goods sold in the income statement for Year 4. None of the of depreciation required an operating cash flow during Year 4. The T-account work sheet entry adds back the $800 of depreciation on manufacturing facilities. Accountants treat depreciation charges on manufacturing facilities as 
A. a period expense.
B. an opportunity cost.
C. a product cost.
D. a cost of capital.
E. a marginal cost.

 

 

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