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UpWork (oDesk) & Accounting Skills Test (Cash Flow) Question & Answers

UpWork (oDesk) & Accounting Skills Test (Cash Flow) Question & Answers are really very important to pass UpWork & Elance test. You will get top score at this skill test exam. If you found any problem or wrong answer please inform me via contact or comments. We will try to solve it in short. This test is extremely valuable to acquire knowledge of this skill. Lets Start test.


Ques : In 2007, XYZ Company had a net loss of $160,000 and reported the following:
Dividends paid: $40,000
Depreciation expense: $30,000
Increase in accounts payable: $15,000
Issuance of stock: $100,000
Retirement of debt: $50,000

Given this data, the amount of cash flow from operations was ______________.
Ans  : ($115,000)

Ques : Equity in the undistributed earnings of a recognized affiliate would appear in which of the following sections of the cash flow statement?
Ans  : Financing section

Ques : Equity income from an affiliate would be shown _____________________.
Ans  : as a deduction from net income in the operations section

Ques : Issuing ten-year bonds will cause cash to ______________ .
Ans  : increase

Ques :  A cash flow statement is typically prepared _____________________.
Ans  : after both the balance sheet and the income statement are prepared

Ques :Which of the following would be shown in the investing section of a cash flow statement?
Ans  : None of the above

Ques : An increase in the accounts payable balance would appear in which of the following sections of the cash flow statement?
Ans  : Operating section

Ques : Pre-paying a one-year insurance policy will cause cash to ______________ .
Ans  : decrease

Ques : Warranties payable that increased during the year would appear in which of the following sections of the cash flow statement?
Ans  : It would not appear on the statement.

Ques : The acquisition of a building and/or land by entering into a lease that meets the capital lease criteria would appear in which of the following sections of the cash flow statement?
Ans  : Investing section

Ques : Which of the following would be shown in the investing section of a cash flow statement?
Ans  :  Acquisition of equipment through a capital lease

Ques : Cash borrowed from a bank by issuing a short-term note payable would appear in which of the following sections of the cash flow statement?
Ans  : Financing section

Ques : Collecting receivables will cause cash to ______________ .
Ans  : increase

Ques : In 2007, XYZ Company had a net income of $150,000 and reported the following:

Depreciation expense: $21,000
Issuance of debt: $120,000
Loss on sale of equipment: $23,000
Purchase of building: $110,000
Increase in inventory: $12,000

Given this data, the amount of cash flow from operations was ______________.
Ans  : $182,000

Ques : The most popular method of presenting cash from operations in a cash flow statement is the _________________.
Ans  :  indirect method

Ques : Preferred stock converted into common stock would appear in which of the following sections of the cash flow statement?
Ans  : Financing section

Ques : An amortization of a bond discount would be shown __________________.
Ans  :  as an add-back to net income when determining cash flow from operations

Ques : Which of the following transactions would be shown on a cash flow statement, but does not affect cash?
Ans  : Exchange of land for stock

Ques : An investment in the stock of another company would appear in which of the following sections of the cash flow statement?
Ans  : Investing section

Ques : Paying previously declared dividends will cause cash to ______________ .
Ans  : decrease

Ques : A payment made from accounts payable will cause cash to ______________ .
Ans  : decrease

Ques : Cash paid for land would be shown as ________________.
Ans  :  cash flow from investing

Ques : Declaring dividends will cause cash to ______________ .
Ans  : show no change

Ques : Amortized discount on bonds payable would appear in which of the following sections of the cash flow statement?
Ans  : Operating section

Ques : In 2007, XYZ Company had a net income of $100,000 and reported the following account changes on its balance sheet:

Accounts Receivable: $6,000 increase
Accounts Payable: $2,000 increase
Building: $8,000 decrease
Accumulated Depreciation: $3,000 increase
Bonds Payable: $16,000 increase

Given this data, the amount of cash flow from operations was ______________.
Ans  :  $99,000

Ques : At the beginning and end of 2007, XYZ Company reported the following balances for Bonds Payable:

Jan 1: $100,000
Dec 31: $140,000
In addition, $60,000 In bonds was retired In 2007.

Given the above data, the amount of Bonds Payable issued during the year was ______________.
Ans  : $100,000

Ques :  Deferred income tax payable that increased during the year would appear in which of the following sections of the cash flow statement?
Ans  : Operating section

Ques : A cash payment for land acquisition would appear in which of the following sections of the cash flow statement?
Ans  : Investing section

Ques : Which of the following typically happens during the growth phase of a product's life cycle?
Ans  :  Cash outflow exceeds cash inflow from investing activities.

Ques : When determining cash flow from operations, which of the following would be a deduction from net income?
Ans  : Increased accounts receivable

Ques : Which of the following would be shown in the financing section of a cash flow statement?
Ans  :  Long-term bonds payable issued

Ques : Salaries paid during the year would appear in which of the following sections of the cash flow statement?
Ans  : Operating section

Ques : Long-term investments sold for cash with a recognized gain would appear in which of the following sections of the cash flow statement?
Ans  : Operating section

Ques : In most countries, the preparation of a __________________ is a common practice.
Ans  : cash flow statement

Ques : On their income statement, XYZ Company reported $600,000 in sales, $320,000 in depreciation expense, $60,000 in income taxes, and $100,000 in other expenses. In addition, $80,000 of common stock was issued for cash during the year. Assuming that the company's non-cash working capital balances did not change during the year, the total amount of cash from operations was ____________.
Ans  : $440,000

Ques : Accounts receivable that increased during the year would appear in which of the following sections of the cash flow statement?
Ans  : Operating section

Ques : Unearned revenue that had been reduced during the year would appear in which of the following sections of the cash flow statement?
Ans  : Operating section

Ques : In determining cash flow from operations, which of the following would be an add-back to net income?
Ans  :  Loss on sale of building

Ques : Accruing an income tax liability will cause cash to ______________ .
Ans  : show no change

Ques : Prepaid rent that increased during the year would appear in which of the following sections of the cash flow statement?
Ans  : Operating section

Ques : Cash received from sale of investment would be shown on a cash flow statement as ___________.
Ans  :  cash flow from investing

Ques : Land acquired by issuing preferred stock would appear in which of the following sections of the cash flow statement?
Ans  :  It would not appear on the statement.

Ques : When determining cash flow from operations, which of the following would NOT be added back to net income?
Ans  : Amortization of bond premium

Ques : On a cash flow statement, depreciation expense ________________.
Ans  : should be added to net income when determining cash provided by operations

Ques : The major components of a cash flow statement are _____________________
Ans  : cash flow from operations, cash flow from investing, and cash flow from financing

Ques : Which of the following statements does NOT illustrate a proper interpretation of information in a cash flow statement?
Ans  : All of the above

Ques :  When preparing cash flow statements, the practice of presenting cash from operations by listing all cash-generating revenues followed by all cash expenses is called the ______________.
Ans  : direct method

Ques : In determining cash flow from operations, which of the following would be added to net income?
Ans  :  Increased accounts payable

Ques : In 2007, XYZ Company had a net loss of $160,000 and reported the following:

Dividends paid: $40,000
Depreciation expense: $30,000
Increase in accounts payable: $15,000
Issuance of stock: $100,000
Retirement of debt: $50,000

Given this data, the net change in cash for 2007 was ______________.
Ans  : ($105,000)

Ques : Which of the following would NOT be shown in the investing section of a cash flow statement?
Ans  : All of the above are shown in the investing section of a cash flow statement

Ques : Acquisition of treasury stock would be shown _____________________.
Ans  : in the financing section

Ques : Which of the following statements expresses the objective of a cash flow statement?
Ans  :  All of the above

Ques :  New equipment purchased by issuing a long-term note payable would appear in which of the following sections of the cash flow statement?
Ans  : Investing section

Ques : Dividends paid for the year would appear in which of the following sections of the cash flow statement?
Ans  :  Financing section

Ques : The sale of equipment for cash with a recognized loss would appear in which of the following sections of the cash flow statement?
Ans  : Operating section

Ques : Depreciation recorded on equipment would appear in which of the following sections of the cash flow statement?
Ans  : Operating section

Ques : Preferred stock issued for cash would appear in which of the following sections of the cash flow statement?
Ans  : Financing section

Ques : The amortization of a recorded patent would appear in which of the following sections of the cash flow statement?
Ans  : Operating section

Ques : When determining cash flow from operations, which of the following would NOT be deducted from net income?
Ans  : Loss on sale of equipment

Ques :  Which of the following statements about depreciation expense is true?
Ans  : All of the above statements are true.

Ques : When determining cash flow from operations, which of the following would NOT be deducted from net income?
Ans  :  Gain on sale of marketable securities

Ques : Which of the following typically happens during the maturation phase of a product's life cycle?
Ans  : Cash outflow exceeds cash inflow from investing activities.

Ques : Treasury stock purchased for cash would appear in which of the following sections of the cash flow statement?
Ans  : Financing section

Ques : The use of a bond sinking fund to retire a long-term debt at maturity would appear in which of the following sections of the cash flow statement?
Ans  : Financing section

Ques : When determining cash flow from operations, which of the following would be added back to net income?
Ans  : All of the above

Ques :  XYZ reported balances in the Accumulated Depreciation account of $130,000 on 01/01/07 and $120,000 on 12/31/07. During 2007, an asset costing $100,000 (with an accumulated depreciation of $80,000) was sold for $20,000.

Given this data, the depreciation expense for 2007 was _____________.
Ans  :  $90,000

Ques : Recording a depreciation expense will cause cash to ______________ .
Ans  : decrease

Ques : Which of the following would be included in the investing section of a cash flow statement?
Ans  : All of the above would be included in the investing section.

Ques :  During 2007, XYZ Company experienced the following changes:

Current liabilities: $75,000 increase
Non-current liabilities: $45,000 decrease
Owners' equity: $51,000 decrease
Non-current assets: $42,000 increase
Current assets (other than Cash): $18,000 increase

Given the above data, the change in cash for 2007 was ____________.
Ans  :  ($81,000)

Ques : The acquisition of a patent would be shown __________________.
Ans  :  in the investing section

Ques : Which of the following is NOT a characteristic of growing firms?
Ans  : All of the above

Ques : Which of the following typically happens during the introduction phase of a product's life cycle?
Ans  :  Cash outflow exceeds cash inflow from investing activities.

Ques : Paying cash to retire preferred stock will cause cash to ______________ .
Ans  : decrease

Ques : Treasury stock sold for an amount greater than its repurchase price would appear in which of the following sections of the cash flow statement?
Ans  : Financing section

Ques : Which of the following transactions would be shown as a cash flow from financing?
Ans  : Cash paid for dividends

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