11.
101
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.
12.
180
Which of the following would not appear in the operating activities section of a statement of cash flows prepared under the direct method?
A) Cash receipts from customers.
B) Cash paid for income taxes.
C) Gain on sale of equipment.
D) Cash paid to employees.
13.
62
Harden Corporation engaged in the following transaction. Assume that the Harden Corporation uses the indirect method to depict cash flows. Indicate where, if at all, dividends received on securities held would be classified on the statement of cash flows.
A) Operating activities section.
B) Investing activities section.
C) Financing activities section.
D) Does not represent a cash flow.
14.
164
All of the following statements about free cash flow are false except
A) significant free cash flow indicates less potential to finance new investment.
B) free cash flow is most commonly calculated by subtracting capital expenditures from cash provided by operations and then adding cash dividends.
C) free cash flow is not reported on the statement of cash flows.
D) significant free cash flow indicates less potential to pay additional dividends.
15.
112
Landis Company reported a net loss of $6,000 for the year ended December 31, 2012. During the year, accounts receivable decreased $14,000, merchandise inventory increased $10,000, accounts payable increased by $20,000, and depreciation expense of $10,000 was recorded. During 2012, operating activities
A) used net cash of $2,000.
B) used net cash of $28,000.
C) provided net cash of $28,000.
D) provided net cash of $18,000.
16.
77
The payment of a cash dividend would be classified as a(n)
A) operating activity.
B) investing activity.
C) financing activity.
D) significant noncash activity.
17.
115
Using the indirect method, patent amortization expense for the period
A) is deducted from net income.
B) causes cash to increase.
C) causes cash to decrease.
D) is added to net income.
18.
111
Foster Company reported a net loss of $10,000 for the year ended December 31, 2012. During the year, accounts receivable decreased $5,000, merchandise inventory increased $8,000, accounts payable increased by $10,000, and depreciation expense of $5,000 was recorded. During 2012, operating activities
A) used net cash of $2,000.
B) used net cash of $8,000.
C) provided net cash of $2,000.
D) provided net cash of $8,000.
True False
19.
38
As an adjustment to operating expenses per the income statement, an increase in accrued liabilities would be added to operating expenses to determine cash payments for operating expenses.
A) True
B) False
20.
21
During the maturity phase, cash from operations and net income are approximately the same.
A) True
B) False

