Financial Accounting Canadian 4Th Edition Libby Test Bank Full Chapter PDF

Financial Accounting Canadian 4th
Edition Libby Test Bank

Visit to download the full and correct content document: https://testbankdeal.com/dow
nload/financial-accounting-canadian-4th-edition-libby-test-bank/
c5
Student: ___________________________________________________________________________
1. Which one of the following items is not generally used in preparing a statement of cash flows?
A. Comparative statements of financial position
B. Current income statement
C. Additional information
D. Adjusted trial balance
2. Which of the following transactions would not create a cash flow?

A. The company purchased some of its own shares from a shareholder.
B. Amortization of patent for the period.
C. Payment of a cash dividend.
D. Sale of equipment at book value (i.e. no gain or loss).
3. Which of the following transactions is not a direct source of cash?

A. Disposal of inventory for cash.
B. Borrowing cash.
C. Sale and issuance of shares for cash.
D. Sale of services on credit.
4. Which of the following transactions is not a direct use of cash?

A. Acquisition of inventory for cash.
B. Purchase of treasury shares with cash.
C. Exchanges of bonds payable for land.
D. Cash dividend paid.
5. How should the statement of cash flows be dated?

A. December 31, 20X.
B. At Year-End December 31, 20X.
C. For the Year Ended December 31, 20X.
D. At December 31, 20X.
6. The category that is generally considered to be the best measure of a company's ability to continue as a going
concern is
A. cash flows from investing activities.
B. cash flows from financing activities.
C. cash flows from operating activities.
D. usually different from year to year.
7. Which of the following transactions is not a typical use of cash?

A. Payment of short-term debt with cash.
B. Purchase of treasury shares for cash.
C. Acquisition of a building for cash.
D. Sale of equipment for less than book value.
8. Which of the following would not be a cash flow from investing activities?
A. Purchase of long-term investments.
B. Sale of a patent.
C. Collection of principal of a note receivable.
D. Collection of interest revenue on a long-term note.
9. Which of the following would not be a cash flow from financing activities?
A. Issuance of common shares.
B. Borrowing on a long-term note payable.
C. Repayment of principal on a long-term note payable.
D. Collection of a cash dividend.
10. Which of the following is a cash flow from operating activities?

A. Purchase of merchandise for resale.
B. Sale of a piece of land no longer used in operations.
C. Sale of long-term investments in common shares.
D. Payment of a note payable.
11. Which of the following would not be a cash equivalent?

A. A $10,000, 30 day certificate of deposit.
B. 500 shares of RIM shares.
C. A three-month Treasury bill.
D. A ten-year Treasury note purchased two months before maturity.
12. Which of the following is a cash inflow from financing activities?
A. proceeds from selling investments in equity securities of another company.
B. proceeds from selling equipment.
C. proceeds from issuance of bonds payable.
D. receipt of interest payments.
13. For an investment to qualify as a cash equivalent, it must be readily convertible to a known amount of cash
and which of the following?
A. it must be identified as a cash equivalent on the income statement.
B. it must mature within 4 months.
C. the investment must have a known foreign exchange rate.
D. must be sufficiently close to its maturity date so that its market value is relatively insensitive to interest rate
changes.
14. A cash inflow from operating activities includes which of the following?
A. collection of the principal of a loan.
B. collection of sales price of equipment used in operations of the business.
C. proceeds from issuance of notes payable.
D. receipt of interest on an investment.
15. Which of the following statements about the statement of cash flows is correct?
A. A company with a net loss on the income statement will always have a net cash outflow from operating
activities.
B. A purchase of equipment is classified as a cash inflow from investing activities.
C. Cash dividends received on equity investments are classified as cash flows from operating activities.
D. Cash dividends paid are classified as cash flows from operating activities.
16. Which of the following items about the statement of cash flows is correct?
A. Noncash expenses such as depreciation are deducted from profit with the indirect method in computing cash
flows from operating activities.
B. Cash equivalents are highly liquid investments with maturities at the date of purchase of less than three
months.
C. The acquisition of land by issuing bonds payable would not appear on the statement of cash flows.
D. Cash paid for interest would be classified as a financing cash flow.
17. Which of the following statements about the statement is correct?
A. The sale of an investment in bonds for less than the carrying value of the investment would be reported as
cash outflow from financing activities.
B. The sale and issuance of common shares for cash would be reported as a cash inflow from financing
activities.
C. The retirement of bonds payable by the issuance of common shares would be reported as a cash inflow from
investing activities.
D. Collecting cash interest revenue on a note receivable would be reported as a cash inflow from investing
activities.
18. Toga Corporation reported profit of $50,000 for the year. During the year, trade receivables increased by
$8,000, trade payables decreased by $4,000 and depreciation expense of $6,000 was recorded. Net cash
provided by operating activities for the year, using the indirect method, is
A. $54,000.
B. $44,000.
C. $56,000.
D. $50,000.
19. Winn Company's 20B income statement reported total revenues, $110,000, and total expenses (including
$10,000 depreciation), $70,000 (i.e., a profit of $40,000). The 20B balance sheet reported the following: trade
receivables--beginning balance, $16,000 and ending balance, $14,000; wages payable--beginning balance,
$2,000 and ending balance, $1,500. Therefore, based only on this information, the 20B net cash inflow from
operating activities was which of the following?
A. $48,500.
B. $50,000.
C. $51,500.
D. $59,500.
20. Jackson Company gathered the following data to prepare its 20B statement of cash flows:
Based only on the above data, the net cash inflow from operating activities during 20B was which of the
following?
A. $43,000.
B. $45,000.
C. $51,000.
D. $53,000.
21. Matlock Company reported total sales revenue of $55,000 and total expenses amounting to $45,000 (i.e.,
profit of $10,000) on its income statement for the year ended December 31, 20B. During 20B, trade receivables
decreased by $4,000, merchandise inventory decreased by $6,000, trade payables increased by $2,000 and
depreciation of $8,000 was recorded. Therefore, based only on this information, the net cash flow from
operating activities for 20B was which of the following?
A. $10,000.
B. $18,000.
C. $19,000.
D. $30,000.
22. Allen Company reported total sales revenue of $150,000 and total expenses of $152,000 (i.e., a net loss of
$2,000) for the year ended December 31, 20D. During 20D, trade receivables decreased by $1,000, trade
payables increased by $5,000, wages payable increased by $3,000, and $18,000 in depreciation expense was
recorded. Assuming no other adjustments are needed, what was the "net cash flow from operating activities" for
20D (parentheses indicate net cash outflow)?
A. ($1,000).
B. $23,000.
C. $25,000.
D. $29,000.
23. Assume the 20D income statement reported total sales revenue of $160,000. The 20C-20D, comparative
statements of financial position showed that trade receivables increased by $10,000. What was the "cash inflow
from customers" for 20D?
A. $140,000.
B. $150,000.
C. $160,000.
D. $170,000.
24. Restless Company's 20B income statement reported total sales revenue of $100,000. The 20A-20B,
comparative statements of financial position showed that trade receivables decreased by $10,000. What were
the 20B "cash receipts from customers"?
A. $80,000.
B. $90,000.
C. $100,000.
D. $110,000.
25. WT Company reported sales revenue of $100,000 and total expenses of $90,000 (including depreciation) for
the year ended December 31, 20A. During 20A, trade receivables decreased by $4,000, merchandise inventory
increased by $3,000, trade payables increased by $2,000, and depreciation expense of $6,000 was recorded.
Assuming no other data are needed, what was the net cash inflow from operating activities for 20A?
A. $19,000.
B. $20,000.
C. $21,000.
D. $24,000.
26. Trade receivables arising from sales to customers amounted to $35,000 and $40,000 at the beginning and
end of the year, respectively. Profit reported on the income statement for the year was $120,000. Exclusive of
the effect of other adjustments, the cash flows from operating activities, prepared using the indirect method, is
A. $120,000.
B. $155,000.
C. $115,000.
D. $125,000.
27. ABC Company reported total sales revenue of $80,000 and total expenses of $72,000 (i.e., profit of $8,000)
for the year ended December 31, 20X. During 20X, trade receivables increased by $3,000, merchandise
inventory decreased by $2,000, trade payables increased by $1,000, and $5,000 in depreciation expense was
recorded. Assuming no other adjustments to profit are needed, what was the net cash inflow from operating
activities?
A. $10,000.
B. $11,000.
C. $13,000.
D. $19,000.
28. The statement of cash flows (indirect method) reports depreciation expense as an addition to profit because
depreciation does which of the following?
A. causes an inflow of funds for the replacement of assets.
B. reduces reported profit of the period but does not involve an outflow of cash for that period.
C. is a direct use of cash.
D. reduces reported profit and causes an inflow of cash.
29. To prepare a statement of cash flows (indirect method), which of the following items should be added back
to profit to derive "cash flow from operating activities"?
A. Depreciation expense.
B. Increase in trade receivables.
C. Gain on a sale of equipment.
D. Decrease in trade payables.
30. Travis Company reported a profit for 20B of $20,000, building depreciation expense of $6,000, and
amortization expense (patent) of $5,000. Also, trade payables increased by $7,000 and inventory decreased by
$2,000. What was the amount of "cash flows from operating activities" for 20B?
A. $34,000.
B. $35,000.
C. $36,000.
D. $40,000.
31. The 20B income statement of Dunn Company reported total sales revenue of $106,000 and total expenses of
$108,000 (i.e., net loss, $2,000). Expenses were: building depreciation, $10,000 and patent amortization,
$5,000. There was an increase in inventory of $1,000. What was cash flow from operating activities during 20B
(parentheses indicate outflow)?
A. ($3,000).
B. $7,000.
C. $12,000.
D. $14,000.
32. Which of the following is not true of the direct method of preparing a statement of cash flows?
A. it gives the user a sense of the magnitude of gross dollars flowing in and out of the company.
B. it has the same cash flows from investing and financing activities as the indirect method.
C. it has a different net cash inflow (outflow) from operating activities than the indirect method.
D. it reports the same net increase or decrease in cash as the indirect method.
33. The financial statements for Ozzie Company show the following:
How much cash was paid for merchandise?

A. $117,000.
B. $119,000.
C. $121,000.
D. $124,000.
34. The 20B income statement for Ryan Corporation showed the following:
What was the cash flow from operating activities?

A. $66,000.
B. $70,000.
C. $82,000.
D. $86,000.
35. Which statement regarding the indirect method is false?

A. Depreciation expense is added back to profit.
B. An increase in trade receivables is added to profit.
C. An increase in trade payables is added to profit.
D. An increase in merchandise inventory is subtracted from profit.
36. The financial statements of Juliet Company show the following:
How much cash was collected from customers?

A. $148,000.
B. $150,000.
C. $154,000.
D. $160,000.
37. Which of the following statements about cash flows from operating activities, in a statement of cash flows
prepared under the indirect method, is correct?
A. An increase in trade receivables would be subtracted from profit.
B. An increase in salaries payable would be subtracted from profit.
C. An increase in inventory would be added to profit.
D. Depreciation expense would be subtracted from profit.
38. Which of the following statements about the quality of earnings ratio is true?
A. When sales are growing, receivables and inventory normally increase faster than trade payable so the ratio
increases.
B. Seasonal variations in sales have no impact on the quality of income ratio.
C. Failure to accrue appropriate expenses will inflate profit and reduce the quality of income ratio.
D. Failure to accrue appropriate expenses will inflate net profit and increase the quality of income ratio.
39. Which of the following statements about the quality of earnings ratio is false?
A. An increase in operating assets and a decrease in liabilities will reduce operating cash flows, thereby
reducing the ratio.
B. Seasonal variations in sales and purchases of inventory can cause wide deviations in the quality of earnings
ratio.
C. When sales are growing, receivables and inventory normally increase at a faster rate than trade payables
often causing operating cash flows to be less than profit.
D. Seasonal variations in sales have no impact on the quality of earnings ratio.
40. In 2012, The W D Company reported profit of $1.3 billion and cash flow from operations of $5.6 billion. In
2011, it profit was $1.9 billion and cash flow from operations was $5.1 billion. What were their quality of
income ratios for 2012 and 2011 respectively?
A. .23 and .37
B. .91 and 1.46
C. 1.10 and .68
D. 4.31 and 2.68
41. In 2012, C Co. reported a quality of earnings ratio of 1.60. In 2011 and 2010 the ratio was .97 and .98
respectively. Which of the following was the most likely cause of the large increase in the ratio?
A. An increase in current assets such as receivables and inventory.
B. An increase in trade payables and accrued liabilities.
C. An increase in sales revenue while profit remained the same.
D. None of these is a likely cause.
42. If a loss of $20,000 is incurred in selling (for cash) office equipment that cost $90,000 and had accumulated
depreciation of $22,500, the total amount reported in the investing activities section of the statement of cash
flows is
A. $70,000.
B. $67,500.
C. $47,500.
D. $87,500.
43. Typical financing activities do NOT include the following:
A. Proceeds from issuance of short- and long-term borrowings.
B. Principal payments on short- and long-term borrowings.
C. Purchase of short- or long-term investments for cash.
D. Purchase of shares for retirement.
44. In 2012, C Co. disclosed cash paid for property, plant and equipment of $1.069 million and cash flow from
operations of $3.883 million. Their average property, plant and equipment from the comparative statement of
financial position was $3.968 million. Compute C Co.'s capital acquisitions ratio for 2012.
A. .28
B. .77
C. .98
D. 3.63
45. In the years 2005-2008, B Co.'s capital acquisitions ratio was 2.74 and from 2009-2012, it was 1.24. From
2009-2012, R Co.'s ratio was .30. Which of the following statements about B Co.'s capital acquisitions ratio is
correct?
A. B Co.'s capital acquisitions ratio is relatively low and indicates inability to finance property, plant and
equipment with cash flow from operations.
B. It appears that R Co. is more aggressive about investing in additional property, plant and equipment than is B
Co.
C. B Co.'s ratio has improved in the period 2009-2012.
D. It appears that B Co. is more aggressive about investing in additional property, plant and equipment than is R
Co.
46. Randy, Inc., issued $50,000 of bonds, paid cash dividends of $8,000, sold long-term investments for
$12,000, received $5,000 of dividend revenue, purchased treasury shares for $15,000, and purchased new
equipment for $19,000. What is the net cash flow from financing activities?
A. ($20,000).
B. $27,000.
C. $70,000.
D. $80,000.
47. A company acquired some land (independently appraised at $12,000) and paid for it by issuing 1,000 shares
of its common shares (par $10 per share; no market price was quoted). How should this be reported on the
statement of cash flows?
A. Report $12,000 as inflow and outflow of cash.
B. Report $12,000 as an inflow of cash.
C. Should not be reported on the statement of cash flows.
D. Report on a schedule of significant noncash transactions if it is material.
48. Lori Company sold an operational asset, a machine, for cash. It originally cost $20,000. The accumulated
depreciation at the date of disposal was $15,000. A gain on the disposal of $2,000 was reported. What was the
cash inflow from this transaction?
A. $3,000.
B. $4,000.
C. $5,000.
D. $7,000.
49. Nelson Company collected the following data in its accounting records in 20B:
No new equipment was purchased during the year. What was the cash inflow from the sale of equipment in
20B?
A. $600.
B. $900.
C. $1,000.
D. $3,900.
50. The income statement, statement of financial position and statement of cash flows all are prepared on the
accrual basis.
True False
51. The statement of cash flows and the statement of cash flows both report on the causes of the changes in the
cash of the business.
True False
52. The net cash inflow or outflow for the year is the same amount as the increase or decrease in cash and cash
equivalents for the year.
True False
53. The statement of cash flows is dated exactly like the income statement but unlike the statement of financial
position.
True False
54. Short-term investments in marketable equity securities are considered the equivalent of cash (i.e., they are
combined with cash) in preparing the statement of cash flows.
True False
55. Cash equivalents are highly liquid investments with original maturities of less than six months.
True False
56. When the statement of cash flows is prepared in conformity with IFRS there is only one acceptable way to
measure and report cash flows from operating activities.
True False
57. The net cash inflow (or outflow) from operating activities is computed by adjusting the reported accrual
profit for noncash revenue and noncash expense items.
True False
58. If there is a change in cash, there will be a change in one or more noncash accounts.
True False
59. When a cash dividend is paid, the cash outflow is classified as an operating activity.
True False
60. Cash equivalents are defined as short-term, highly liquid investments that are readily convertible into known
amounts of cash and are so near their maturity that there is insignificant risk of changes in their value due to
interest rate changes.
True False
61. The statement of cash flows is the only financial statement prepared on the cash basis of accounting rather
than on the accrual basis of accounting.
True False
62. Only investments with original maturities of less than three months at the date of purchase qualify as cash
equivalents.
True False
63. Cash collected from customers is a cash flow from a financing activity.
True False
64. The amortization of a patent is treated in a similar manner to depreciation of a building when preparing the
operating activities section of the statement of cash flows using the indirect method.
True False
65. The payment to shareholders for repurchase of treasury shares is a cash flow from a financing activity.
True False
66. The payment of interest on a note payable is a cash flow from an operating activity.
True False
67. Dividends collected from a long-term investment are cash flows from investing activities.
True False
68. Collection of principal on a note receivable is a cash flow from investing activities.
True False
69. Loans to other companies (notes receivable) are cash flows from investing activities.
True False
70. The date in the heading of a statement of cash flows should say, "At December 31, 20A," rather than "For
the Year Ended December 31, 20A."
True False
71. Very few companies use the direct method for disclosing their cash flows from operating activities.
True False
72. The net increase (or decrease) in cash that is reported on the statement of cash flows should be the same as
the change in the balance of the cash account for the two most recent years on the comparative statements of
financial position.
True False
73. The sales revenue reported on the income statement for 20A totaled $96,000, of which one third was on
credit. The 20A beginning balance of trade receivables was zero and the 20A ending balance reported on the
statement of financial position was $10,000; therefore, the 20A cash inflow from customer sales was $86,000.
True False
74. Expenses reported on the income statement for 20A (the first year of operations), totaled $60,000, which
included depreciation expense of $8,000, and wages payable increased to $3,000 by the end of 20A. Therefore,
the 20A cash outflow for expenses was $71,000.
True False
75. Depreciation expense does not cause a cash outflow for the current period; therefore, it should never be
shown on the statement of cash flows.
True False
76. In order to prepare the statement of cash flows, the accountant must analyze current asset and current
liability balances.
True False
77. The indirect method for reporting cash flows from operating activities presents a conversion of profit to net
cash flow from operating activities.
True False
78. Depreciation expense has the immediate effect of increasing the cash account.
True False
79. Increases in current liabilities are added to profit while decreases in current liabilities are subtracted from
profit to derive the net cash flows.
True False
80. The quality of earnings ratio (Cash Flow from Operating Activities ¸ Profit) measures the portion of profit
that was generated in cash.
True False
81. Investing activities include cash proceeds from the sale of property, plant, and equipment, and short- and
long-term investments.
True False
82. A higher quality of earnings ratio indicates that it is less likely that the company is using aggressive revenue
recognition policies to increase profit.
True False
83. Investing activities reported on the statement of cash flows include cash payments to acquire property, plant,
and equipment, and short- and long-term investments.
True False
84. The capital acquisitions ratio (Cash Flow from Operating Activities ¸ Cash Paid for Property, Plant, and
Equipment) reflects the portion of purchases of property, plant, and equipment financed from operating
activities without the need for outside debt or equity financing or the sale of other investments or other
long-term assets.
True False
85. A low capital acquisitions ratio indicates a higher need to obtain outside financing to expand property, plant,
and equipment assets.
True False
86. Cash payments associated with interest relate to operating activities.

True False
87. Non-cash investing and financing activities are disclosed only as supplemental disclosures to the statement
of cash flows in either narrative or schedule form.
True False
88. Wish Corporation acquired a computer for $15,000 and paid for it in full by issuing 1,000 shares of its own
common shares, par $10 (current market price $15 share). This transaction should not be reported on the
statement of cash flows because cash was neither paid out nor received.
True False
89. A transaction that does not cause an inflow or outflow of cash should be reported on the statement of cash
flows only if it is an adjustment to convert accrual profit to the cash basis.
True False
90. The purchase of a piece of equipment in exchange for common shares must be reported on the statement of
cash flows.
True False
91. Billton Company purchased a machine in the current year for $18,000. Payment included cash, $5,000; a
one-year note payable, $5,000; and a 2-year, $8,000 note payable. This decreases cash by $5,000 in the current
year.
True False
92. When using the indirect method, a loss on the sale of equipment should be added to profit to derive cash
True False
93. Match each activity below with the proper classification by inserting the proper capital letter in the space to
the left.
Classification of Activity
I. Investing
F. Financing
O. Operating
Activity
____ 1. Collection of interest on a note receivable.

____ 2. Payment of debt principal with cash.
____ 3. Sales of operational assets (used in the business).
____ 4. Payment of cash dividends.
____ 5. Issuance of shares for cash.
____ 6. Borrowing cash from the bank.
____ 7. Purchase of operational assets for cash.
____ 8. Collections of dividends on long-term investments.
94. Indicate the proper classification for each of the transactions by inserting the proper letter in the space to the
left.
Classifications
A. Operating Activities
B. Investing Activities
C. Financing Activities
D. Schedule of non-cash transactions
E. Not included in the statement of cash flows
Transaction
____ 1. Declared a cash dividend.

____ 2. Paid a previously declared cash dividend.
____ 3. Issued shares for a new machine.
____ 4. Borrowed cash on a short-term note.
____ 5. Borrowed cash on a long-term note.
____ 6. Purchased treasury shares for cash.
____ 7. Paid interest on a note payable.
____ 8. Purchased treasury shares and gave a long-term note payable.
____ 9. Purchased land with a short-term note payable.
___ 10. Purchased shares in another company.
___ 11. Purchased land for cash.
95. For each of the following items, indicate whether they would appear in the operating, investing, or financing
activities section of the statement of cash flows. Place a check mark in the appropriate column for each
transaction. If neither an operating, investing, or financing activity is appropriate, place a check mark in the
"none" column. Assume the indirect method is used for reporting.
96. Using the indirect method, calculate the amount of cash flows from operating activities from the following
data:
97. The comparative statements of financial position for Hirj Inc. appear below:
Additional information:
1. Profit for the year ending December 31, 2012 was $27,000.
2. Cash dividends of $13,000 were declared and paid during the year ended December 31, 2012.
3. Long-term investments that had a carrying amount of $23,000 were sold for $18,000 in 2012.
Required: Prepare a statement of cash flows for the year ended December 31, 2012, using the indirect method.
98. Use the following information to prepare a statement of cash flows (direct method) for Yoyo Corporation
for the year ended December 31, 20B.
99. Morgan Company is preparing a statement of cash flows using the indirect method. The following data are
available:
100. Reba Company reported profit of $10,000 for 20A. Additional 20A information is as follows:
Based on the information given above, the statement of cash flows would show "cash flows from operating
activities" of $______________
101. McIntire Company reported profit of $40,000 which included depreciation expense and depletion expense
of $21,000 and $18,000, respectively. The following changes also occurred during 20C
The amount of "cash flows from operating activities" was $______________

102. Complete the following statement of cash flows using the indirect method:
103.
The following changes were noted from the statement of financial position: trade receivables increased $8,000;
inventory increased $4,000; trade payables increased $6,000; prepaid expense decreased $2,000; accrued
liability decreased $5,000; and interest payable increased $1,000
Required: Prepare the operating activities section of the statement of cash flows using the indirect method.
104. The following information was reported from the statement of cash flows for The W D Company for the
years 2010 through 2012 in millions of dollars:
A. Calculate the quality of income ratio for the years 2010 through 2012.
B. Interpret the quality of earnings ratio for The W D Company for the three year period.
105. C Co. reported the following information from their statement of cash flows in millions of dollars:
(A) Calculate the quality of income ratio for C Co for the three years:
(B) In 2011, P Co. reported a quality of earnings ratio of 1.61. Compare C Co.'s quality of earnings ratio for that
year to their competitor's ratio.
106. The following information was available from the financial statements of C Co. Company for the years
2011 and 2012 in millions of dollars:
A. Calculate the capital acquisitions ratio for C Co. for the two years:
B. Comment on the sufficiency of the capital acquisitions ratio for the two years.
107. The following information is provided from the cash flow statement for Toys 4 U for the years 2008
through 2012 in millions of dollars:
(A) Calculate the capital acquisitions ratio for Toys 4 U for the five year period from 2008 to 2020.
(B) Comment on the capital acquisitions ratio for Toys 4 U for the five years.
108. While preparing a statement of cash flow, you encountered the following transaction:
February 1, 20A: Zorro Corporation acquired a small office building in exchange for 5,000 shares of its own
common shares; par value $10 per share; market value $15 per share.
(a) Should this transaction be included in the calculations on the statement of cash flows or shown in the notes?
(b) Explain your answer.
c5 Key
1. Which one of the following items is not generally used in preparing a statement of cash flows?
A. Comparative statements of financial position
B. Current income statement
C. Additional information
D. Adjusted trial balance
Difficulty: Medium
Gradable: automatic
Learning Objective: 1
Libby - Chapter 05 #1
2. Which of the following transactions would not create a cash flow?

A. The company purchased some of its own shares from a shareholder.
B. Amortization of patent for the period.
C. Payment of a cash dividend.
D. Sale of equipment at book value (i.e. no gain or loss).
Difficulty: Medium
Gradable: automatic
3. Which of the following transactions is not a direct source of cash?

A. Disposal of inventory for cash.
B. Borrowing cash.
C. Sale and issuance of shares for cash.
D. Sale of services on credit.
Difficulty: Easy
Gradable: automatic
4. Which of the following transactions is not a direct use of cash?
A. Acquisition of inventory for cash.
B. Purchase of treasury shares with cash.
C. Exchanges of bonds payable for land.
D. Cash dividend paid.
Difficulty: Medium
Gradable: automatic
5. How should the statement of cash flows be dated?

A. December 31, 20X.
B. At Year-End December 31, 20X.
C. For the Year Ended December 31, 20X.
D. At December 31, 20X.
Difficulty: Easy
Gradable: automatic
6. The category that is generally considered to be the best measure of a company's ability to continue as a going
concern is
A. cash flows from investing activities.
B. cash flows from financing activities.
C. cash flows from operating activities.
D. usually different from year to year.
Difficulty: Easy
Gradable: automatic
7. Which of the following transactions is not a typical use of cash?

A. Payment of short-term debt with cash.
B. Purchase of treasury shares for cash.
C. Acquisition of a building for cash.
D. Sale of equipment for less than book value.
Difficulty: Easy
Gradable: automatic
8. Which of the following would not be a cash flow from investing activities?
A. Purchase of long-term investments.
B. Sale of a patent.
C. Collection of principal of a note receivable.
D. Collection of interest revenue on a long-term note.
Difficulty: Medium
Gradable: automatic
9. Which of the following would not be a cash flow from financing activities?
A. Issuance of common shares.
B. Borrowing on a long-term note payable.
C. Repayment of principal on a long-term note payable.
D. Collection of a cash dividend.
Difficulty: Medium
Gradable: automatic
10. Which of the following is a cash flow from operating activities?

A. Purchase of merchandise for resale.
B. Sale of a piece of land no longer used in operations.
C. Sale of long-term investments in common shares.
D. Payment of a note payable.
Difficulty: Medium
Gradable: automatic
11. Which of the following would not be a cash equivalent?

A. A $10,000, 30 day certificate of deposit.
B. 500 shares of RIM shares.
C. A three-month Treasury bill.
D. A ten-year Treasury note purchased two months before maturity.
Difficulty: Medium
Gradable: automatic
12. Which of the following is a cash inflow from financing activities?
A. proceeds from selling investments in equity securities of another company.
B. proceeds from selling equipment.
C. proceeds from issuance of bonds payable.
D. receipt of interest payments.
Difficulty: Easy
Gradable: automatic
13. For an investment to qualify as a cash equivalent, it must be readily convertible to a known amount of cash
and which of the following?
A. it must be identified as a cash equivalent on the income statement.
B. it must mature within 4 months.
C. the investment must have a known foreign exchange rate.
D. must be sufficiently close to its maturity date so that its market value is relatively insensitive to interest rate
changes.
Difficulty: Medium
Gradable: automatic
14. A cash inflow from operating activities includes which of the following?
A. collection of the principal of a loan.
B. collection of sales price of equipment used in operations of the business.
C. proceeds from issuance of notes payable.
D. receipt of interest on an investment.
Difficulty: Easy
Gradable: automatic
15. Which of the following statements about the statement of cash flows is correct?
A. A company with a net loss on the income statement will always have a net cash outflow from operating
activities.
B. A purchase of equipment is classified as a cash inflow from investing activities.
C. Cash dividends received on equity investments are classified as cash flows from operating activities.
D. Cash dividends paid are classified as cash flows from operating activities.
Difficulty: Medium
Gradable: automatic
16. Which of the following items about the statement of cash flows is correct?
A. Noncash expenses such as depreciation are deducted from profit with the indirect method in computing cash
B. Cash equivalents are highly liquid investments with maturities at the date of purchase of less than three
months.
C. The acquisition of land by issuing bonds payable would not appear on the statement of cash flows.
D. Cash paid for interest would be classified as a financing cash flow.
Difficulty: Medium
Gradable: automatic
17. Which of the following statements about the statement is correct?

A. The sale of an investment in bonds for less than the carrying value of the investment would be reported as
cash outflow from financing activities.
B. The sale and issuance of common shares for cash would be reported as a cash inflow from financing
activities.
C. The retirement of bonds payable by the issuance of common shares would be reported as a cash inflow from
investing activities.
D. Collecting cash interest revenue on a note receivable would be reported as a cash inflow from investing
activities.
Difficulty: Medium
Gradable: automatic
18. Toga Corporation reported profit of $50,000 for the year. During the year, trade receivables increased by
$8,000, trade payables decreased by $4,000 and depreciation expense of $6,000 was recorded. Net cash
provided by operating activities for the year, using the indirect method, is
A. $54,000.
B. $44,000.
C. $56,000.
D. $50,000.
Calculation: $50,000-8,000-4,000 + 6,000 = $44,000
Difficulty: Medium
Gradable: automatic
19. Winn Company's 20B income statement reported total revenues, $110,000, and total expenses (including
$10,000 depreciation), $70,000 (i.e., a profit of $40,000). The 20B balance sheet reported the following: trade
receivables--beginning balance, $16,000 and ending balance, $14,000; wages payable--beginning balance,
$2,000 and ending balance, $1,500. Therefore, based only on this information, the 20B net cash inflow from
operating activities was which of the following?
A. $48,500.
B. $50,000.
C. $51,500.
D. $59,500.
Calculation: $40,000 + 10,000 + 2,000-500 = $51,500
Difficulty: Hard
Gradable: automatic
20. Jackson Company gathered the following data to prepare its 20B statement of cash flows:
Based only on the above data, the net cash inflow from operating activities during 20B was which of the
following?
A. $43,000.
B. $45,000.
C. $51,000.
D. $53,000.
Calculation: $40,000 + 5,000 + 3,000 + 4,000 + 1,000-2,000 = $51,000
Difficulty: Medium
Gradable: automatic
21. Matlock Company reported total sales revenue of $55,000 and total expenses amounting to $45,000 (i.e.,
profit of $10,000) on its income statement for the year ended December 31, 20B. During 20B, trade receivables
decreased by $4,000, merchandise inventory decreased by $6,000, trade payables increased by $2,000 and
depreciation of $8,000 was recorded. Therefore, based only on this information, the net cash flow from
operating activities for 20B was which of the following?
A. $10,000.
B. $18,000.
C. $19,000.
D. $30,000.
Calculation: $10,000 + 4,000 + 6,000 + 2,000 + 8,000 = $30,000
Difficulty: Medium
Gradable: automatic
22. Allen Company reported total sales revenue of $150,000 and total expenses of $152,000 (i.e., a net loss of
$2,000) for the year ended December 31, 20D. During 20D, trade receivables decreased by $1,000, trade
payables increased by $5,000, wages payable increased by $3,000, and $18,000 in depreciation expense was
recorded. Assuming no other adjustments are needed, what was the "net cash flow from operating activities" for
20D (parentheses indicate net cash outflow)?
A. ($1,000).
B. $23,000.
C. $25,000.
D. $29,000.
Calculation: ($2,000) + 1,000 + 5,000 + 3,000 + 18,000 = $25,000
Difficulty: Medium
Gradable: automatic
23. Assume the 20D income statement reported total sales revenue of $160,000. The 20C-20D, comparative
statements of financial position showed that trade receivables increased by $10,000. What was the "cash inflow
from customers" for 20D?
A. $140,000.
B. $150,000.
C. $160,000.
D. $170,000.
Calculation: $160,000-10,000 = $150,000
Difficulty: Medium
Gradable: automatic
24. Restless Company's 20B income statement reported total sales revenue of $100,000. The 20A-20B,
comparative statements of financial position showed that trade receivables decreased by $10,000. What were
the 20B "cash receipts from customers"?
A. $80,000.
B. $90,000.
C. $100,000.
D. $110,000.
Calculation: $100,000 + 10,000 = $110,000
Difficulty: Medium
Gradable: automatic
25. WT Company reported sales revenue of $100,000 and total expenses of $90,000 (including depreciation) for
the year ended December 31, 20A. During 20A, trade receivables decreased by $4,000, merchandise inventory
increased by $3,000, trade payables increased by $2,000, and depreciation expense of $6,000 was recorded.
Assuming no other data are needed, what was the net cash inflow from operating activities for 20A?
A. $19,000.
B. $20,000.
C. $21,000.
D. $24,000.
Calculation: $10,000 + 6,000 + 4,000-3,000 + 2,000 = $19,000
Difficulty: Medium
Gradable: automatic
26. Trade receivables arising from sales to customers amounted to $35,000 and $40,000 at the beginning and
end of the year, respectively. Profit reported on the income statement for the year was $120,000. Exclusive of
the effect of other adjustments, the cash flows from operating activities, prepared using the indirect method, is
A. $120,000.
B. $155,000.
C. $115,000.
D. $125,000.
Calculation: $120,000 - $5,000 = $115,000
Difficulty: Medium
Gradable: automatic
27. ABC Company reported total sales revenue of $80,000 and total expenses of $72,000 (i.e., profit of $8,000)
for the year ended December 31, 20X. During 20X, trade receivables increased by $3,000, merchandise
inventory decreased by $2,000, trade payables increased by $1,000, and $5,000 in depreciation expense was
recorded. Assuming no other adjustments to profit are needed, what was the net cash inflow from operating
activities?
A. $10,000.
B. $11,000.
C. $13,000.
D. $19,000.
Calculation: $8,000-3,000 + 2,000 + 1,000 + 5,000 = $13,000
Difficulty: Medium
Gradable: automatic
28. The statement of cash flows (indirect method) reports depreciation expense as an addition to profit because
depreciation does which of the following?
A. causes an inflow of funds for the replacement of assets.
B. reduces reported profit of the period but does not involve an outflow of cash for that period.
C. is a direct use of cash.
D. reduces reported profit and causes an inflow of cash.
Difficulty: Medium
Gradable: automatic
29. To prepare a statement of cash flows (indirect method), which of the following items should be added back
to profit to derive "cash flow from operating activities"?
A. Depreciation expense.
B. Increase in trade receivables.
C. Gain on a sale of equipment.
D. Decrease in trade payables.
Difficulty: Medium
Gradable: automatic
30. Travis Company reported a profit for 20B of $20,000, building depreciation expense of $6,000, and
amortization expense (patent) of $5,000. Also, trade payables increased by $7,000 and inventory decreased by
$2,000. What was the amount of "cash flows from operating activities" for 20B?
A. $34,000.
B. $35,000.
C. $36,000.
D. $40,000.
Calculation: $20,000 + 6,000 + 5,000 + 7,000 + 2,000 = $40,000
Difficulty: Medium
Gradable: automatic
31. The 20B income statement of Dunn Company reported total sales revenue of $106,000 and total expenses of
$108,000 (i.e., net loss, $2,000). Expenses were: building depreciation, $10,000 and patent amortization,
$5,000. There was an increase in inventory of $1,000. What was cash flow from operating activities during 20B
(parentheses indicate outflow)?
A. ($3,000).
B. $7,000.
C. $12,000.
D. $14,000.
Calculation: ($2,000) + 10,000 + 5,000-1,000 = $12,000
Difficulty: Medium
Gradable: automatic
32. Which of the following is not true of the direct method of preparing a statement of cash flows?
A. it gives the user a sense of the magnitude of gross dollars flowing in and out of the company.
B. it has the same cash flows from investing and financing activities as the indirect method.
C. it has a different net cash inflow (outflow) from operating activities than the indirect method.
D. it reports the same net increase or decrease in cash as the indirect method.
Difficulty: Medium
Gradable: automatic
33. The financial statements for Ozzie Company show the following:
How much cash was paid for merchandise?

A. $117,000.
B. $119,000.
C. $121,000.
D. $124,000.
Calculation: $121,000 + 1,000-3,000 = $119,000
Difficulty: Medium
Gradable: automatic
34. The 20B income statement for Ryan Corporation showed the following:
What was the cash flow from operating activities?

A. $66,000.
B. $70,000.
C. $82,000.
D. $86,000.
Calculation: $81,000 + 8,000-5,000 + 2,000 = $86,000
Difficulty: Medium
Gradable: automatic
35. Which statement regarding the indirect method is false?
A. Depreciation expense is added back to profit.
B. An increase in trade receivables is added to profit.
C. An increase in trade payables is added to profit.
D. An increase in merchandise inventory is subtracted from profit.
Difficulty: Medium
Gradable: automatic
36. The financial statements of Juliet Company show the following:
How much cash was collected from customers?

A. $148,000.
B. $150,000.
C. $154,000.
D. $160,000.
Calculation: $154,000 + 6,000 = $160,000
Difficulty: Medium
Gradable: automatic
37. Which of the following statements about cash flows from operating activities, in a statement of cash flows
prepared under the indirect method, is correct?
A. An increase in trade receivables would be subtracted from profit.
B. An increase in salaries payable would be subtracted from profit.
C. An increase in inventory would be added to profit.
D. Depreciation expense would be subtracted from profit.
Difficulty: Medium
Gradable: automatic
38. Which of the following statements about the quality of earnings ratio is true?
A. When sales are growing, receivables and inventory normally increase faster than trade payable so the ratio
increases.
B. Seasonal variations in sales have no impact on the quality of income ratio.
C. Failure to accrue appropriate expenses will inflate profit and reduce the quality of income ratio.
D. Failure to accrue appropriate expenses will inflate net profit and increase the quality of income ratio.
Difficulty: Hard
Gradable: automatic
39. Which of the following statements about the quality of earnings ratio is false?
A. An increase in operating assets and a decrease in liabilities will reduce operating cash flows, thereby
reducing the ratio.
B. Seasonal variations in sales and purchases of inventory can cause wide deviations in the quality of earnings
ratio.
C. When sales are growing, receivables and inventory normally increase at a faster rate than trade payables
often causing operating cash flows to be less than profit.
D. Seasonal variations in sales have no impact on the quality of earnings ratio.
Difficulty: Medium
Gradable: automatic
40. In 2012, The W D Company reported profit of $1.3 billion and cash flow from operations of $5.6 billion. In
2011, it profit was $1.9 billion and cash flow from operations was $5.1 billion. What were their quality of
income ratios for 2012 and 2011 respectively?
A. .23 and .37
B. .91 and 1.46
C. 1.10 and .68
D. 4.31 and 2.68
Calculation: $5.6/1.3; $5.1/1.9
Difficulty: Hard
Gradable: automatic
41. In 2012, C Co. reported a quality of earnings ratio of 1.60. In 2011 and 2010 the ratio was .97 and .98
respectively. Which of the following was the most likely cause of the large increase in the ratio?
A. An increase in current assets such as receivables and inventory.
B. An increase in trade payables and accrued liabilities.
C. An increase in sales revenue while profit remained the same.
D. None of these is a likely cause.
Difficulty: Hard
Gradable: automatic
42. If a loss of $20,000 is incurred in selling (for cash) office equipment that cost $90,000 and had accumulated
depreciation of $22,500, the total amount reported in the investing activities section of the statement of cash
flows is
A. $70,000.
B. $67,500.
C. $47,500.
D. $87,500.
Calculation: $90,000-22,500-20,000 = $47,500
Difficulty: Medium
Gradable: automatic
43. Typical financing activities do NOT include the following:

A. Proceeds from issuance of short- and long-term borrowings.
B. Principal payments on short- and long-term borrowings.
C. Purchase of short- or long-term investments for cash.
D. Purchase of shares for retirement.
Difficulty: Medium
Gradable: automatic
44. In 2012, C Co. disclosed cash paid for property, plant and equipment of $1.069 million and cash flow from
operations of $3.883 million. Their average property, plant and equipment from the comparative statement of
financial position was $3.968 million. Compute C Co.'s capital acquisitions ratio for 2012.
A. .28
B. .77
C. .98
D. 3.63
Calculation: 3.883/1.069 = 3.63
Difficulty: Medium
Gradable: automatic
45. In the years 2005-2008, B Co.'s capital acquisitions ratio was 2.74 and from 2009-2012, it was 1.24. From
2009-2012, R Co.'s ratio was .30. Which of the following statements about B Co.'s capital acquisitions ratio is
correct?
A. B Co.'s capital acquisitions ratio is relatively low and indicates inability to finance property, plant and
equipment with cash flow from operations.
B. It appears that R Co. is more aggressive about investing in additional property, plant and equipment than is B
Co.
C. B Co.'s ratio has improved in the period 2009-2012.
D. It appears that B Co. is more aggressive about investing in additional property, plant and equipment than is R
Co.
Difficulty: Hard
Gradable: automatic
46. Randy, Inc., issued $50,000 of bonds, paid cash dividends of $8,000, sold long-term investments for
$12,000, received $5,000 of dividend revenue, purchased treasury shares for $15,000, and purchased new
equipment for $19,000. What is the net cash flow from financing activities?
A. ($20,000).
B. $27,000.
C. $70,000.
D. $80,000.
Calculation: $50,000-8,000-15,000 = $27,000
Difficulty: Medium
Gradable: automatic
47. A company acquired some land (independently appraised at $12,000) and paid for it by issuing 1,000 shares
of its common shares (par $10 per share; no market price was quoted). How should this be reported on the
statement of cash flows?
A. Report $12,000 as inflow and outflow of cash.
B. Report $12,000 as an inflow of cash.
C. Should not be reported on the statement of cash flows.
D. Report on a schedule of significant noncash transactions if it is material.
Difficulty: Medium
Gradable: automatic
48. Lori Company sold an operational asset, a machine, for cash. It originally cost $20,000. The accumulated
depreciation at the date of disposal was $15,000. A gain on the disposal of $2,000 was reported. What was the
cash inflow from this transaction?
A. $3,000.
B. $4,000.
C. $5,000.
D. $7,000.
Calculation: ($20,000-15,000) + 2,000 = $7,000
Difficulty: Medium
Gradable: automatic
49. Nelson Company collected the following data in its accounting records in 20B:
No new equipment was purchased during the year. What was the cash inflow from the sale of equipment in
20B?
A. $600.
B. $900.
C. $1,000.
D. $3,900.
Calculation: ($12,500-8,000)-(2,000 + 1,000-2,400)-3,000 = $900
Difficulty: Hard
Gradable: automatic
50. The income statement, statement of financial position and statement of cash flows all are prepared on the
accrual basis.
FALSE
Difficulty: Easy
Gradable: automatic
51. The statement of cash flows and the statement of cash flows both report on the causes of the changes in the
cash of the business.
FALSE
Difficulty: Medium
Gradable: automatic
52. The net cash inflow or outflow for the year is the same amount as the increase or decrease in cash and cash
equivalents for the year.
TRUE
Difficulty: Medium
Gradable: automatic
53. The statement of cash flows is dated exactly like the income statement but unlike the statement of financial
position.
TRUE
Difficulty: Easy
Gradable: automatic
54. Short-term investments in marketable equity securities are considered the equivalent of cash (i.e., they are
combined with cash) in preparing the statement of cash flows.
FALSE
Difficulty: Medium
Gradable: automatic
55. Cash equivalents are highly liquid investments with original maturities of less than six months.
FALSE
Difficulty: Medium
Gradable: automatic
56. When the statement of cash flows is prepared in conformity with IFRS there is only one acceptable way to
measure and report cash flows from operating activities.
FALSE
Difficulty: Easy
Gradable: automatic
57. The net cash inflow (or outflow) from operating activities is computed by adjusting the reported accrual
profit for noncash revenue and noncash expense items.
TRUE
Difficulty: Medium
Gradable: automatic
58. If there is a change in cash, there will be a change in one or more noncash accounts.
TRUE
Difficulty: Medium
Gradable: automatic
59. When a cash dividend is paid, the cash outflow is classified as an operating activity.
FALSE
Difficulty: Medium
Gradable: automatic
60. Cash equivalents are defined as short-term, highly liquid investments that are readily convertible into known
amounts of cash and are so near their maturity that there is insignificant risk of changes in their value due to
interest rate changes.
TRUE
Difficulty: Medium
Gradable: automatic
61. The statement of cash flows is the only financial statement prepared on the cash basis of accounting rather
than on the accrual basis of accounting.
TRUE
Difficulty: Easy
Gradable: automatic
Another random document with
no related content on Scribd:
into the boilers, and accumulated there. It saponified and formed a
foam which filled the whole boiler and caused the water to be worked
over with the steam as fast as it could be fed in. I have always
wondered why the engine, being vertical, should not have exhibited
any sign of the water working through it at the upper end of the
cylinder. The explanation after all appears simple. The water on
entering the steam chest mostly fell to the bottom and little passed
through the upper ports. The trouble from oil was not felt at all in the
Lancashire boiler. This, I suppose, was due to three causes. The
latter held a far greater body of water, had a much larger extent of
evaporating surface, and far greater steam capacity. I was always
sorry that I did not give the Harrison boiler the better chance it would
have had with a jet condenser.
In this pair of diagrams, which are copied from the catalogue of
Ormerod, Grierson & Co., the low steam pressure, 29 pounds above
the atmosphere, will be observed. This was about the pressure
commonly carried. The pressure in the exhibition boilers, 75 pounds,
was exhibited by Mr. John Hick, of Bolton, as a marked advance on
the existing practice.
In preparing for the governor manufacture I had my first revelation
of the utter emptiness of the Whitworth Works. Iron gear patterns
were required, duplicates of those which had been cut for me at
home by Mr. Pratt. The blanks for these gears were turned as soon
as possible after I reached Manchester, and sent to the Whitworth
Works to be cut. It seemed as though we should never get them.
Finally, after repeated urging, the patterns came. I was sent for to
come into the shop and see them. They were in the hands of the
best fitter we had, who, by the way, was a Swedenborgian preacher
and preached every Sunday. The foreman told me he had given
them to this man to see if it was possible to do anything with them,
and he thought I ought to see them before he set about it. I could
hardly believe my eyes. There was no truth about them. The spaces
and the teeth differed so much that the same tooth would be too
small for some spaces and could not be wedged into others; some
would be too thick or too thin at one end. They were all alike bad,
and presented all kinds of badness. It was finally concluded to make
the best of them, and this careful man worked on them more than
two days to make them passable.
The first governor order that was booked was the only case that
ever beat me. I went to see the engine. It was a condensing beam-
engine of good size, made by Ormerod, Grierson & Co. to maintain
the vacuum in a tube connecting two telegraph offices in
Manchester, and had been built to the plans and specifications of the
telegraph company’s engineer. The engine had literally nothing to
do. A little steam air-pump that two men could have lifted and set on
a bench would have been just suitable for the work. They could not
carry low enough pressure nor run slowly enough. On inspection I
reported that we should have nothing to do with it.
The custom of making whatever customers order and taking no
responsibility was first illustrated to me in this curious way. I saw a
queer-looking boiler being finished in the boiler-shop. In reply to my
question the foreman told me they were making it for a cotton-
spinner, according to a plan of his own. It consisted of two boilers,
one within the other. The owner’s purpose was to carry the ordinary
steam pressure in the outer boiler, and a pressure twice as great in
the inner one, when the inner boiler would have to suffer the stress
of only one half the pressure it was carrying.
I asked the superintendent afterwards why they did not tell that
man that he could not maintain steam at two different temperatures
on the opposite sides of the same sheets. He replied: “Because we
do not find it profitable to quarrel with our customers. That is his
idea. If we had told him there was nothing in it, he would not have
believed us, but would have got his boiler made somewhere else.”
Perhaps the most curious experience I ever had was that of
getting the governor into cotton-mills. There was a vast field all
around us, and we looked for plenty of orders. This was the
reception I met with every time. After listening to the winning story I
had to tell, the cotton lord would wind up with this question: “Well, sir,
have you got a governor in a large cotton-mill?” After my answer in
the negative I was bowed out. I early got an order from Titus Salt &
Son, of Saltaire, for two large governors but these did not weigh at
all with a cotton-spinner; they made alpaca goods.
The way the governor was finally got into cotton-mills, where
afterwards its use became general, was the most curious part. A mill
in the city of Manchester was troubled by having its governor fly in
pieces once in a while. After one of these experiences the owners
thought that they might cure the difficulty by getting one of my
governors. That flew in pieces in a week. I went to see the engine.
The cause of all the trouble appeared at a glance. The fly-wheel was
on the second-motion shaft which ran at twice the speed of the main
shaft, and the gearing between them was roaring away enough to
deafen one. The governor was driven by gearing. The vibrations
transmitted to the governor soon tired the arms out. I saw the son of
the principal owner, and explained the cause of the failure of every
governor they had tried, and told him the only remedy, which would
be a complete one, would be to drive the governor by a belt. That, he
replied, was not to be thought of for an instant. I told him he knew
himself that a governor could not endure if driven in any other way,
and that I had hundreds of governors driven by belts, which were
entirely reliable in all cases. “But,” said he, “supposing the belt runs
off the pulley.” “The consequence,” I replied, “cannot be worse than
when the governor flies in pieces.” After wasting considerable time in
talk, he said, “Well, leave it till my father comes home; he is absent
for a few days.” “No,” said I, “if I can’t convince a young man, I shall
not try to convince an old man.” Finally, with every possible
stipulation to make it impossible for the belt to come off, he yielded
his assent, and I had the governor on in short order, lacing the belt
myself, to make sure that it was butt-jointed and laced in the
American fashion.
More than three years afterwards, two days before I was to sail for
home, I met this man on High Street, in Manchester. It was during
the Whitsuntide holidays, and the street was almost deserted. He
came up to me, holding out both hands and grasping mine most
cordially. “Do you know,” said he, “that we have increased our
product 10 per cent., and don’t have half as many broken threads as
we had before, and it’s all that belt.”
Condenser and Air-pump designed by Mr. Porter. (Cross-section)
The tendency towards the horizontal type of engine, in place of the

beam-engine, began to be quite marked in England about that time.
This was favorable to the use of the Allen engine. The only thing that
seemed wanting to its success was a directly connected jet
condenser. No one believed that an air-pump could be made to run
successfully at the speed of 150 double strokes per minute. Yet this
had to be done, or I could not look for any considerable adoption of
the high-speed engine. This subject occupied my mind continually.
When I returned from Oporto, I had thought out the plan of this
condenser, and at once set about the drawings for it. No alteration
was ever made from the first design of the condenser, which I
intended to show with the engine at the coming Paris Exposition in
1867, and which I finally did succeed in showing there, but under
very different and unexpected relations.
The philosophy of this condenser is sufficiently shown in the
accompanying vertical cross-section. A hollow ram, only equal in
weight to the water which it displaced, ran through a stuffing-box at
the front end of the chamber, and was connected with an extension
of the piston-rod of the engine. So the center line of the engine
extended through this single-acting ram, which had the full motion of
the piston. It ran through the middle of a body of water, the surface of
which fell as the ram was withdrawn, and rose as it returned. A quiet
movement of the water was assured by three means: First, the
motion of the ram was controlled by the crank of the engine, and so
began and ceased insensibly. Second, the motion of the ram, of two
feet, produced a rise or fall of the surface of the water of only about
one inch. Third, the end of the ram was pointed, a construction which
does not appear in this sectional view, permitting it to enter and
leave the water at every point gradually. Both the condenser and the
hot-well were located above the chamber in which the ram worked.
The problem was to obtain complete displacement by means of
solid water without any admixture of free air, the expansion of which
as the plunger was withdrawn would reduce the efficiency of the air-
pump. To effect this object the air must be prevented from mingling
with the water, and must be delivered into the hot-well first. This was
accomplished by two means: First, placing the condenser as well as
the hot-well above the air-pump chamber, as already stated, and
secondly, inclining the bottom of the condenser, so that the water
would pass through the inlet valves at the side farthest from, and the
air at the side nearest to, the hot-well. Thus the air remained above
the water, and as the latter rose it sent the air before it quite to the
delivery valves. Pains were taken to avoid any place where air could
be trapped, so it was certain that on every stroke the air would be
sent through the delivery valves first, mingled air and water, if there
were any, next, and the solid water last, insuring perfect
displacement.
I have a friend who has often asked me, with a manner showing
his conviction that the question could not be answered, “How can
you know that anything will work until you have tried it?” In this case I
did know that this condenser would work at rapid speed before I tried
it. The event proved it, and any engineer could have seen that it
must have worked. The only question in my mind was as to the
necessity of the springs behind the delivery valves. Experiment was
needed to settle that question, which it did in short order. At the
speed at which the engine ran, the light springs improved the
vacuum a full pound, showing that without them these valves did not
close promptly.
The following important detail must not be overlooked. The rubber
disk valves were backed by cast-iron plates, which effectually
preserved them from being cut or even marked by the brass
gratings. These plates were made with tubes standing in the middle
of them, as shown. These tubes afforded long guides on the stems,
and a projection of them on the under side held the valves in place
without any wear. They also determined the rise of the valves. The
chambers, being long and narrow, accommodated three inlet and
three outlet valves. The jet of water struck the opposite wall with
sufficient force to fill the chamber with spray.
When the plans for this condenser were completed, and the Evan
Leigh engine had been vindicated, I felt that the success of the high-
speed system was assured, and looked forward to a rapidly growing
demand for the engines. We got out an illustrated catalogue of sizes,
in which I would have put the condenser, but the firm decided that it
would be better to wait for that until it should be on the same footing
with the engine, as an accomplished fact.
Suddenly, like thunder from a clear sky, I received notice that
Ormerod, Grierson & Co. were in difficulties, had stopped payment,
placed their books in the hands of a firm of accountants, and called a
meeting of their creditors, and the works were closed. Some of their
enormous contracts had proved losing ones. I had made such
provision in my contract with them that on their failure my license to
them became void. Otherwise it would have been classed among
their assets.
CHAPTER XII
Introduction to the Whitworth Works. Sketch of Mr. Whitworth. Experience in the

Whitworth Works. Our Agreement which was never Executed. First Engine in
England Transmitting Power by a Belt.
was still debating with myself what course to take,

when I received a note from Mr. W. J. Hoyle, secretary
of the Whitworth Company, inquiring if I were free from
any entanglement with the affairs of Ormerod,
Grierson & Co., to which I was able to make a
satisfactory reply. Mr. Hoyle was then a stranger to
me. It appeared that he was an accomplished steam engineer, and
had been employed as an expert to test one of my engines in
operation, an engine which we had made for a mill-owner in
Bradford. He had been very favorably impressed by the engine, so
much so as to form this scheme. He had been with the Whitworth
Company only a short time, and was struck with the small amount of
work they were doing in their tool department; and after his
observation of the engine at Bradford, learning of the stoppage of
Ormerod, Grierson & Co., it occurred to him that it would be a good
thing for his company to undertake the manufacture of these
engines. After receiving my answer to his preliminary inquiry, having
Mr. Whitworth, as he afterwards told me, where he could not get
away, on a trip from London to Manchester, he laid the plan before
him and talked him into it. I directly after received an invitation to
meet Mr. Whitworth at his office, and here commenced what I verily
believed was one of the most remarkable experiences that any man
ever had.
William J. Hoyle
In the course of our pretty long interview, which terminated with

the conclusion of a verbal agreement, Mr. Whitworth talked with me
quite freely, and told me several things that surprised me. One was
the frank statement that he divided all other toolmakers in the world
into two classes, one class who copied him without giving him any
credit, and the other class who had the presumption to imagine that
they could improve on him. His feelings towards both these classes
evidently did not tend to make him happy. Another thing, which I
heard without any sign of my amazement, was that he had long
entertained the purpose of giving to the world the perfect steam-
engine. “That is,” he explained, “an engine embodying all those
essential principles to which steam-engine builders must sooner or
later come.” This, he stated, had been necessarily postponed while
he was engaged in developing his system of artillery, but he was
nearing the completion of that work and should then be able to
devote himself to it.
I cannot perhaps do better than stop here and give my
impressions of Mr. Whitworth. He was in all respects a phenomenal
man. As an engineer, or rather a toolmaker, he addressed himself to
all fundamental constructive requirements and problems, and
comprehended everything in his range and grasp of thought,
continually seeking new fields to conquer. Long after the period here
referred to he closed his long and wonderful career by giving to the
world the hollow engine shaft and the system of hydraulic forging. At
that time he was confidently anticipating the adoption by all nations
of his system of artillery. He had made an immense advance, from
spherical shot, incapable of accurate aim and having a high
trajectory, to elongated shot, swiftly rotating in its flight and having a
comparatively flat trajectory, and which could hit the mark and
penetrate with destructive effect at distances of several miles. These
fundamental features of modern artillery thus originated with Mr.
Whitworth. All his other features have been superseded, but his
elongated pointed rotating projectile will remain until nations shall
learn war no more; a time which in the gradual development of
humanity cannot be far away. Before I left England, however, he had
abandoned his artillery plans in most bitter disappointment. He had
met the English official mind. By the authorities of the war and navy
departments it had been unanimously decided that what England
wanted was, not accuracy of aim and penetration at long range, but
smashing effects at close quarters. The record of that is to be found
in the proceedings of the House of Commons in 1868, only thirty-
nine years ago. Think of that!
Mr. Whitworth was not only the most original engineering genius
that ever lived. He was also a monumental egotist. His fundamental
idea was always prominent, that he had taught the world not only all
that it knew mechanically, but all it ever could know. His fury against
tool-builders who improved on his plans was most ludicrous. He
drew no distinction between principles and details. He must not be
departed from even in a single line. No one in his works dared to
think. This disposition had a striking illustration only a short time—
less than a year—before I went there. He had no children. His
nearest relatives were two nephews, W. W. and J. E. Hulse. The
latter was a tool-manufacturer in Salford. W. W. Hulse was Mr.
Whitworth’s superintendent, and had been associated with him for
twenty-four years, for a long time as his partner, the firm being
Joseph Whitworth & Company. Lately the business had been taken
over by a corporation formed under the style of the Whitworth
Company, and Mr. Hulse became the general superintendent.
Mr. Whitworth was taken sick, and for a while was not expected to
live, and no one thought, even if he did get better, that he would ever
be able to visit his works again. Mr. Hulse had been chafing under
his restraint, and during Mr. Whitworth’s absence proceeded to make
a few obvious improvements in their tools, such, for example, as
supporting the table of their shaper, so that it would not yield under
the cut. To the surprise of every one, Mr. Whitworth got well, and
after more than six months’ absence, he appeared again at the
works. Walking through, he noted the changes that had been made,
sent for Mr. Hulse, discharged him on the spot, and ordered
everything restored to its original form.
To return now to my own experience. Since Mr. Whitworth had
been absorbed in his artillery development he had given only a
cursory oversight to the tool manufacture. Mr. Hulse had been
succeeded as superintendent by a man named Widdowson, whose
only qualification for his position was entire subserviency to Mr.
Whitworth.
Sir Joseph Whitworth
My drawings and patterns were purchased by the Whitworth

Company, and I was installed with one draftsman in a separate
office, and prepared to put the work in hand at once for a 12×24-inch
engine for the Paris Exposition, where Ormerod, Grierson & Co. had
secured the space, and the drawings for which I had completed. If I
remember rightly, the patterns were finished also. While I was getting
things in order, Mr. Widdowson came into my office, and in a very
important manner said to me: “You must understand, sir, that we
work here to the decimal system and all drawings must be
conformed to it.” I received this order meekly, and we went to work to
make our drawings all over, for the single purpose of changing their
dimensions from binary to decimal divisions of the inch. There was of
course quite a body of detail drawings, and to make these over, with
the pains required to make these changes to an unaccustomed
system, and make and mount the tracings, took us nearly three
weeks. When finished I took the roll of tracings to Mr. Widdowson’s
office. He was not in, and I left them for him. An hour or so later he
came puffing and blowing into my office with the drawings. He was a
heavy man, and climbing upstairs exhausted him. When he got his
breath, he broke out: “We can’t do anything with these. Haven’t got a
decimal gauge in the shop.” “You gave me express orders to make
my drawings to the decimal system.” “Damn it, I meant in halves and
quarters and all that, and write them decimals.” So all that work and
time were thrown away, and we had to make a new set of tracings
from the drawings I had brought, in order to figure the dimensions in
decimals. He told me afterwards that when Mr. Whitworth
commenced the manufacture of cylindrical gauges he made them to
the decimal divisions of the inch, imagining that was a better mode of
division than that by continual bisection, and supposing that he had
influence enough to effect the change. But nobody would buy his
gauges. He had to call them in and make what people wanted. “And
now,” said Mr. Widdowson, “there is not a decimal gauge in the
world.” He knew, too, for up to that time they made them all. So Mr.
Whitworth could make a mistake, and I found that this was not the
worst one that he had made.
While time was being wasted in this manner, the subject of
manufacturing the governors came up. Mr. Whitworth concluded that
he would first try one on his own shop engine, so one was bought
from Ormerod, Grierson & Co. I had a message from Mr. Widdowson
to come to the shop and see my governor. It was acting in a manner
that I had seen before, the counterpoise rising and dropping to its
seat twice every time the belt lap came around. “Total failure, you
see,” said Mr. Widdowson, “and I got a new belt for it, too.” I saw a
chance to make an interesting observation, and asked him if he
would get an old belt and try that. This he did, lapping the ends as
before about 18 inches, according to the universal English custom,
which I had long before found it necessary carefully to avoid. As I
knew would be the case, the action was not improved at all. I then
cut off the lap, butted the ends of the belt, and laced them in the
American style, and lo! the trouble vanished. The governor stood
motionless, only floating up and down slightly with the more
important changes of load. Mr. Whitworth was greatly pleased, and
at once set about their manufacture, in a full line of sizes.
He made the change, to which I have referred already, from the
urn shape to the semi-spherical form of the counterpoise. In this
connection he laid the law down to me in this dogmatic fashion: “Let
no man show me a mechanical form for which he cannot give me a
mechanical reason.” But Jove sometimes nods. They were to exhibit
in Paris a large slotting-machine. The form of the upright did not suit
Mr. Whitworth exactly. He had the pattern set up in the erecting-
shop, and a board tacked on the side, cut to an outline that he
directed. He came to look at it every day for a week, and ordered
some change or other. Finally it was gotten to his mind, the pattern
was altered accordingly, and a new casting made. This was set up in
the shop, and I happened to be present when he came to see it.
“Looks like a horse that has been taught to hold his head up,” said
he. “Mechanical reason,” thought I, fresh from my lesson. When
finished the slotting-machine was tried in the shop, and found to
yield in the back. The tool sprang away from its work and rounded
the corner. Mr. Whitworth had whittled the pattern away and ruined it.
Instead of being sent to Paris, it was broken up.
My experiment with the governor proved the defect in the English
system of lacing belts. Every machine in the land, of whatever kind,
tool or loom or spinning or drawing frame, or whatever it was, driven
by a belt, halted in its motion every time the lap in the belt passed
over a pulley, sufficiently to drop my governor, when the same
motion was given to it, and no one had ever observed this
irregularity.
I thought they would never be ready to set about work on the
engine. First, Mr. Widdowson ordered that every casting and forging,
large and small, must be in the shop before one of them was put in
hand. After this was done I found a number of men at work making
sheet-iron templets of everything. I saw one man filing the threads in
the edges of a templet for a ³⁄₈-inch bolt. When these were all
finished and stamped, an operation that took quite a week, a great
fuss was made about commencing work on everything
simultaneously.
I went into the shop to see what was going on. The first thing to
attract my attention was the steam-chest, then made separate from
the cylinder. A workman—their best fitter, as I afterwards learned—
was engaged in planing out the cavities in which the exhaust valves
worked. I saw no center line, and asked him where it was. He had
never heard of such a thing. “What do you measure from?” “From
the side of the casting.” I called his attention to the center line on the
drawing, from which all the measurements were taken, and told him
all about it. He seemed very intelligent, and under my direction set
the chest up on a plane table and made a center line around it and
another across it, and set out everything from these lines, and I left
him going on finely. An hour later I looked in again. He was about his
job in the old way. To my question he explained that his foreman had
come around and told him I had no business in the shop, that he
gave him his directions, and he must finish his job just as he began
it.
I made no reply but went to Mr. Hoyle’s office, and asked him if he
knew what they were doing in the shop. He smiled and said, “I
suppose they are finally making an engine for you.” “No, they are
not.” “What are they doing?” “Making scrap iron.” “What do you
mean?” I told him the situation. He took his hat and went out, saying,
“I must see this myself.”
A couple of hours later he sent for me, and told me this. “I have
been all around the works and seen all that is doing. It is all of the
same piece. I have had a long interview with Mr. Widdowson, and
am sorry to tell you that we can’t make your engine; we don’t know
how. It seems to be entirely out of our line. The intelligence does not
exist in these works to make a steam-engine. Nobody knows how to
set about anything. I have stopped the work, and want to know what
you think had better be done about it?” I asked him to let me think
the matter over till the next morning. I then went to him and
suggested to him to let me find a skilled locomotive-erecter who was
also a trained draftsman, and to organize a separate department for
the engine and governor manufacture, and put this man at the head
of it, to direct it without interference. This was gladly agreed to. I
found a young man, Mr. John Watts, who proved to be the very man
for the place. In a week we were running under Mr. Watts’ direction,
and the engine was saved. But what a time the poor man had!
Everything seemed to be done wrong. It is hardly to be believed. He
could not get a rod turned round, or a hole bored round.
In their toolmaking they relied entirely on grinding with “Turkey
dust.” I once saw a gang of a dozen laborers working a long
grinding-bar, in the bore, 10 inches diameter by 8 feet long, in the
tailstock of an enormous lathe. I peered through this hole when the
bar was withdrawn. It looked like a ploughed field. Scattered over it
here and there were projections which had been ground off by these
laborers. On the other hand, the planing done in these works was
magnificent. I never saw anything to equal it. But circular work beat
them entirely. I found that the lathe hands never thought of such a
thing as getting any truth by the sliding cut. After that they went for
the surface with coarse files, and relied for such approximate truth as
they did get upon grinding with the everlasting Turkey dust.
Mr. Whitworth invented the duplex lathe tool, but I observed that
they never used it. I asked Mr. Widdowson why this was. “Because,”
said he, “the duplex tool will not turn round.” After a while I found out
why. When our engine was finished, Mr. Widdowson set it upon two
lathe beds and ran it. Lucky that he did. The bottom of the engine
bed was planed, and it could be leveled nicely on the flat surfaces of
their lathe beds. The fly-wheel ran nearly a quarter of an inch out of
truth. He set up some tool-boxes on one of the lathe beds, and
turned the rim off in place, both sides and face being out. That, of
course, made it run perfectly true. I asked the lathe hand how he
could turn out such a job. He replied, “Come and see my lathe.” I
found the spindle quite an eighth of an inch loose in the main
bearing, the wear of twenty or thirty years. He told me all of the
lathes in the works were in a similar condition. That explained many
things. The mystery of those gear patterns was solved. Every spindle
in the gear-cutting machine was wabbling loose in its holes. I can’t
call them bearings. Now it appeared why they could not use the
duplex tools. With a tool cutting on one side, they relied on the
pressure of the cut to keep the lathe spindle in contact with the
opposite side of its main bearing, and a poor reliance that was, but
with a tool cutting on each side, fancy the situation. Then boring a
true hole was obviously impossible. The workmen became
indifferent; they had no reamers, relied entirely on grinding. I asked,
Why do you not renew these worn-out bushings? but could never get
an answer to the question. Some power evidently forbade it, and the
fact is that no man about the place dared to think of such a thing as
intimating to Mr. Whitworth that one of his lathe bearings required
any fixing up, or that it was or could be anything short of perfect. He
(Mr. Whitworth) had designed it as a perfect thing; ergo, it was
perfect, and no man dared say otherwise.
Our engine work was finally, as a last resort, done by Mr. Watts on
new lathes, made for customers and used for a month or two before
they were sent out. Not only in England, but on the Continent and in
America, the Whitworth Works were regarded as the perfect
machine-shop. I remember a visit I had at the Paris Exposition from
Mr. Elwell, of the firm of Varrell, Elwell & Poulot, proprietors of the
largest mechanical establishment in Paris. After expressing his
unbounded admiration of the running of the engine, he said, “I
warrant your fly-wheel runs true.” After observing it critically, he
exclaimed, “Ah, they do those things at Whitworth’s!”
The fact was Mr. Whitworth had cursed the British nation with the
solid conical lathe-spindle bearing, a perfect bearing for ordinary-
sized lathes and a most captivating thing—when new. These
hardened steel cones, in hardened steel seats, ran in the most
charming manner. But they wore more loose in the main bearing
every day they ran, and there were no means for taking up the wear.
It came on insensibly, and no one paid any attention to it. The cream
of the joke was that people were so fascinated with this bearing that
at that time no other could be sold in England, except for very large
lathes. All toolmakers had to make it. I remember afterwards that Mr.
Freeland, our best American toolmaker, who, as I have already
mentioned, went to England and worked for some years as a
journeyman in the Whitworth Works for the purpose of learning
everything there that he could, did not bring back to America the
conical bearing.
The firm of Smith & Coventry were the first to fit their lathes with
the means for taking up this wear, which took place only in the main
bearing, where both the force of the cut and the weight of the piece
were received. They made the conical seat for the back end of the
spindle adjustable in the headstock and secured it by a thin nut on
each end. This then could be moved backward sufficiently to let the
forward cone up to its seat. This made it possible to use the solid
bearing, but it involved this error, that after this adjustment the axis of
the spindle did not coincide with the line connecting the lathe
centers; but the two lines formed an angle with each other, which
grew more decided every time the wear was taken up. This,
however, was infinitely better than not to take up the wear at all.
At that time the Whitworth Works were divided into four
departments. These were screwing machinery, gauges, guns and
machine tools. The first three of these were locked. I never entered
either of them. The latter also, like most works in England, was
closed to outsiders. No customer could see his work in progress.
This department was without a head or a drawing-office. It seemed
to be running it on its traditions. I once said to Mr. Hoyle, “There
must at some time have been here mechanical intelligence of the
highest order, but where is it?” They had occasionally an order for
something out of their ancient styles, and their attempts to fill such
orders were always ruinous. The following is a fair illustration. They
had an order for a radial drill to be back-geared and strong enough
to bore an 8-inch hole. Mr. Widdowson had the pattern for the upright
fitted with the necessary brackets, and thought it was such a good
thing that he would make two. The first one finished was tried in the
shop, and all the gears in the arm were stripped. He woke up to the
fact that he had forgotten to strengthen the transmitting parts, and
moreover that the construction would not admit anything stronger.
There was nothing to be done but to decline the order, chip off the
brackets, and make these into single-speed drills. This I saw being
done.
Mr. Widdowson told me the following amusing story. The London
Times had heard of the wonderful performance of Mr. Hoe’s multiple-
cylinder press, and concluded to have one of them of the largest
size, ten cylinders. But, of course, Mr. Hoe did not know how to
make his own presses. His work would do well enough for ignorant
Americans, but not for an English Journal. The press must be made
in England in the world-renowned Whitworth Works.
Mr. Hoe sent over one of his experts to give them the information
they might need, but they would not let him in the shop. Mr. Hulse
told him they had the drawings and specifications and that was all
they needed. When the press was finished they set it up in the shop
and attempted to run it. The instant it started every tape ran off its
pulleys, and an investigation showed that not a spindle or shaft was
parallel with any other. They had no idea of the method that must be
employed to ensure this universal alignment. After enormous labor
they got these so that they were encouraged to make another trial,
when after a few revolutions every spindle stuck fast in its bearings.
Mr. Whitworth, absorbed in his artillery and spending most of his
time in London, of course had no knowledge of how things were
going on in his shop, of the utter want of ordinary intelligence.
I formed a scheme for an application of Mr. Whitworth’s system of
end measurement to the production of an ideally perfect dividing-
wheel. In this system Mr. Whitworth employed what he termed “the
gravity piece.” This was a small steel plate about ¹⁄₈ of an inch in
thickness, the opposite sides of which were parallel and had the
most perfectly true and smooth surfaces that could be produced by
scraping. The ends of the piece to be tested were perfectly squared,
by a method which I will not stop here to describe, and were finished

Financial Accounting Canadian 4Th Edition Libby Test Bank Full Chapter PDF

Uploaded by

Copyright:

Available Formats

Financial Accounting Canadian 4Th Edition Libby Test Bank Full Chapter PDF

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Financial Accounting Canadian 4Th Edition Libby Test Bank Full Chapter PDF

Uploaded by

Copyright:

Available Formats

Financial Accounting Canadian 4th

Edition Libby Test Bank

2. Which of the following transactions would not create a cash flow?

3. Which of the following transactions is not a direct source of cash?

4. Which of the following transactions is not a direct use of cash?

5. How should the statement of cash flows be dated?

7. Which of the following transactions is not a typical use of cash?

10. Which of the following is a cash flow from operating activities?

11. Which of the following would not be a cash equivalent?

How much cash was paid for merchandise?

What was the cash flow from operating activities?

35. Which statement regarding the indirect method is false?

36. The financial statements of Juliet Company show the following:

How much cash was collected from customers?

86. Cash payments associated with interest relate to operating activities.

____ 1. Collection of interest on a note receivable.

____ 1. Declared a cash dividend.

The amount of "cash flows from operating activities" was $______________

2. Which of the following transactions would not create a cash flow?

3. Which of the following transactions is not a direct source of cash?

5. How should the statement of cash flows be dated?

7. Which of the following transactions is not a typical use of cash?

10. Which of the following is a cash flow from operating activities?

11. Which of the following would not be a cash equivalent?

17. Which of the following statements about the statement is correct?

Calculation: $50,000-8,000-4,000 + 6,000 = $44,000

Calculation: $40,000 + 10,000 + 2,000-500 = $51,500

Calculation: $40,000 + 5,000 + 3,000 + 4,000 + 1,000-2,000 = $51,000

Calculation: $10,000 + 4,000 + 6,000 + 2,000 + 8,000 = $30,000

Calculation: ($2,000) + 1,000 + 5,000 + 3,000 + 18,000 = $25,000

Calculation: $160,000-10,000 = $150,000

Calculation: $100,000 + 10,000 = $110,000

Calculation: $10,000 + 6,000 + 4,000-3,000 + 2,000 = $19,000

Calculation: $120,000 - $5,000 = $115,000

Calculation: $8,000-3,000 + 2,000 + 1,000 + 5,000 = $13,000

Calculation: $20,000 + 6,000 + 5,000 + 7,000 + 2,000 = $40,000

Calculation: ($2,000) + 10,000 + 5,000-1,000 = $12,000

How much cash was paid for merchandise?

Calculation: $121,000 + 1,000-3,000 = $119,000

What was the cash flow from operating activities?

Calculation: $81,000 + 8,000-5,000 + 2,000 = $86,000

36. The financial statements of Juliet Company show the following:

How much cash was collected from customers?

Calculation: $154,000 + 6,000 = $160,000

Calculation: $5.6/1.3; $5.1/1.9

Calculation: $90,000-22,500-20,000 = $47,500

43. Typical financing activities do NOT include the following:

Calculation: 3.883/1.069 = 3.63

Calculation: $50,000-8,000-15,000 = $27,000

Calculation: ($20,000-15,000) + 2,000 = $7,000

Calculation: ($12,500-8,000)-(2,000 + 1,000-2,400)-3,000 = $900

The tendency towards the horizontal type of engine, in place of the

Introduction to the Whitworth Works. Sketch of Mr. Whitworth. Experience in the

was still debating with myself what course to take,

In the course of our pretty long interview, which terminated with

My drawings and patterns were purchased by the Whitworth

You might also like