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Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN: 9781337115773
Author: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher: Cengage Learning
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Textbook Question
Chapter 14, Problem 10MCQ
An increase in inventories is deducted from net income to arrive at operating
- a. cash payments to customers were larger than the purchases made during the period.
- b. purchases are larger than the cost of goods sold by the amount that inventories increased.
- c. cash payments to customers were less than the purchases made during the period.
- d. purchases are less than the cost of goods sold by the amount that inventories increased.
- e. All of these.
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Students have asked these similar questions
Which of the statements is Not True about operating cash flowsa) Depreciation expenses are subtracted from cash outflowsb) Increases in inventories are deducted from cost of the goods soldc) It is equal to cash collected from sales - cash outflows for production costs- cash outflows for operating expenses – cash outflows for financial expenses – cash outflows for taxesd) Increases in the trade receivables are deducted from net sales
Which of the following adjustments would NOT be made to net income when computing cash from operating activities?
a.add an increase in Accrued Interest Payable
b.deduct the purchase of store equipment
c.add the reduction in Accounts Receivable
d.add the decrease in Merchandise Inventory
Which of the following has a different effect on net profit than it does on cashflow?
A.Cash sale to customer
B.Payment for wages
C.Payment for rent
D.Depreciation of equipment
Chapter 14 Solutions
Managerial Accounting: The Cornerstone of Business Decision-Making
Ch. 14 - Prob. 1DQCh. 14 - Prob. 2DQCh. 14 - Of the three categories on the statement of cash...Ch. 14 - Prob. 4DQCh. 14 - Why is it better to report the noncash investing...Ch. 14 - Prob. 6DQCh. 14 - Prob. 7DQCh. 14 - Explain how a company can report a loss and still...Ch. 14 - In computing the periods net operating cash flows,...Ch. 14 - Prob. 10DQ
Ch. 14 - In computing the periods net operating cash flows,...Ch. 14 - Explain the reasoning for including the payment of...Ch. 14 - What are the advantages in using worksheets when...Ch. 14 - Prob. 14DQCh. 14 - Cash inflows from operating activities come from...Ch. 14 - Prob. 2MCQCh. 14 - Prob. 3MCQCh. 14 - Sources of cash include a. profitable operations....Ch. 14 - Uses of cash include a. cash dividends. b. the...Ch. 14 - Prob. 6MCQCh. 14 - Prob. 7MCQCh. 14 - Which of the following adjustments to net income...Ch. 14 - An increase in accounts receivable is deducted...Ch. 14 - An increase in inventories is deducted from net...Ch. 14 - The gain on sale of equipment is deducted from net...Ch. 14 - Which of the following is an investing activity?...Ch. 14 - Which of the following is a financing activity? a....Ch. 14 - Prob. 14MCQCh. 14 - A worksheet approach to preparing the statement of...Ch. 14 - In a completed worksheet, a. the debit column...Ch. 14 - Prob. 17BEACh. 14 - Prob. 18BEACh. 14 - Prob. 19BEACh. 14 - Prob. 20BEACh. 14 - Swasey Company earned net income of 1,800,000 in...Ch. 14 - Prob. 22BEACh. 14 - Prob. 23BEACh. 14 - During 20X2, Norton Company had the following...Ch. 14 - Prob. 25BEBCh. 14 - Prob. 26BEBCh. 14 - Roberts Company provided the following partial...Ch. 14 - Prob. 28BEBCh. 14 - Prob. 29BEBCh. 14 - Prob. 30BEBCh. 14 - Prob. 31BEBCh. 14 - During 20X2, Evans Company had the following...Ch. 14 - Stillwater Designs is a private company and...Ch. 14 - Prob. 34ECh. 14 - Jarem Company showed 189,000 in prepaid rent on...Ch. 14 - During the year, Hepworth Company earned a net...Ch. 14 - During 20X1, Craig Company had the following...Ch. 14 - Tidwell Company experienced the following during...Ch. 14 - Prob. 39ECh. 14 - Oliver Company provided the following information...Ch. 14 - Prob. 41ECh. 14 - Prob. 42ECh. 14 - Prob. 43ECh. 14 - Solpoder Corporation has the following comparative...Ch. 14 - Solpoder Corporation has the following comparative...Ch. 14 - The following financial statements were provided...Ch. 14 - Prob. 47PCh. 14 - Prob. 48PCh. 14 - Booth Manufacturing has provided the following...Ch. 14 - The following balance sheets and income statement...Ch. 14 - The following balance sheets and income statement...Ch. 14 - Balance sheets for Brierwold Corporation follow:...Ch. 14 - Balance sheets for Brierwold Corporation follow:...Ch. 14 - Prob. 54PCh. 14 - Prob. 55PCh. 14 - The following balance sheets were taken from the...Ch. 14 - The following balance sheets were taken from the...Ch. 14 - The comparative balance sheets and income...
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- Cash flow from operating activities is increased by: a. depreciation and amortization b. a decrease in accounts receivable c. a decrease in inventory d. an increase in accounts payable e. all of thesearrow_forwardWhich of the following is used in computing cash received from customers using the direct method? a.An increase in inventory b.A decrease in accounts receivable c.A decrease in inventory d.An increase in accounts payablearrow_forwardWhich of the following should be subtracted from net income in computing net cash flows from operating activities using the indirect method? a.A decrease in inventory b.An increase in accrued expenses c.A decrease in prepaid expenses d.An increase in inventoryarrow_forward
- Which of the following should be deducted from net income in computing net cash flows from operating activities using the indirect method? a.a decrease in accounts receivable b.preferred dividends declared and paid c.a decrease in accounts payable d.a decrease in inventoryarrow_forwardWhich of the following should be subtracted from net income in computing net cash flows from operating activities using the indirect method? a.A decrease in inventory b.A decrease in prepaid expenses c.An increase in inventory d.An increase in accrued expensesarrow_forwardWhich one of the following will decrease the length of the cash cycle O a. Increase in inventory period O b. Increase in accounts receivable period C .Increase in accounts payable period d. Decrease in accounts payable periodarrow_forward
- Which of the following would be classified as a use of cash? a. An increase in depreciation. b. A decrease in accounts receivable. c. A decrease in accruals. d. Both decrease in accounts receivable & decrease in accruals e. All of thesearrow_forwardWhich of the following items is deducted from net income to arrive at cash flow from operations when using the indirect method? a) Decrease in accounts payable b) Depreciation expense c) Amortization expense d) Decrease in accounts receivablearrow_forwardWhich of the following questions cannot be answered when analyzing the information presented in an income statement? a. What were the sales for the period? b. What was the profit for the period? c. How much was spent to pay salaries during the period? d. What was the cash balance at the end of the period?arrow_forward
- Which one of the following is a source of cash? A. decrease in accounts receivableB. decrease in accounts payable C. decrease in common stockD. increase in inventoryarrow_forwardpreparing an indirect method statement of cash flows, an increase in ending inventory over beginning inventory will result in an adjustment to reported net earnings because O a. cash was increased while cost of goods sold was decrease O b. cost of goods sold on an accrual basis is lower than on a cash basis. O c. inventory purchased during the period was less than inventory sold resulting in a net cash increase. d. O d. acquisition of inventory is an investment activity.arrow_forwardAn increase in accounts receivable is deducted from net income to obtain operating cash flows because a. cash collections increased due to increasing sales. b. cash collections from customers were less than the revenues reported. c. cash collections decreased due to declining sales. d. cash collections from customers were greater than the revenues reported. e. None of these.arrow_forward
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INVENTORY & COST OF GOODS SOLD; Author: Accounting Stuff;https://www.youtube.com/watch?v=OB6RDzqvNbk;License: Standard Youtube License