Acct Ch 11

¡Supera tus tareas y exámenes ahora con Quizwiz!

Which of the following methods for reporting cash flows from operating activities begins with net income and works backward to calculate net cash flow from operating activities?

Indirect method

Adjustments to net income in calculating operating cash flows include:

1. Changes in current assets and current liabilities 2. Noncash items 3. Nonoperating items

The three classifications on the statement of cash flows are cash flows from

1. Financing 2. Operating 3. Investing

When using the indirect method to prepare the operating activities section of the statement of cash flows, the first amount listed is BLANK BLANK

1. Net 2. Income

Which of the following are common noncash items requiring adjustment to net income under the indirect method?

1. depreciation expense 2. amortization expense

When preparing the statement of cash flows using the indirect method, depreciation expense is ______ ______ net income.

added to

The direct method for preparing the statement of cash flows reports

cash received and cash paid from operating activities.

Using the BLANK method of reporting cash flows from operating activities, we show cash received from customers and cash paid to employees.

direct

The two generally accepted formats for reporting cash flows from operating activities using U.S. GAAP are the

direct and indirect method.

Wiese Company presents its statement of cash flows using the direct method. Wiese must also prepare the operating section using the indirect method and report it:

either along with the direct method on the face of the statement or in the financial statement notes

Cash flows from BLANK activities include both inflows and outflows of cash from the external funding of a business.

financing

Cash inflows and outflows involving stockholders and creditors are classified on the statement of cash flows as BLANK activities.

financing

Issuing stock to owners is classified as a(n) BLANK activity.

financing

Repayments of formal, long-term debt contracts are classified as ______ activities.

finaning

Norbert Company reports the following net cash flows in its statement of cash flows: net inflow from operating activities: $200; net outflow from investing activities: $220; net inflow from financing activities: $130. The current year beginning balance of cash was $80. During the current year, cash must have

increased by $110. 200 - 220 + 130

The BLANK method of reporting cash flows from operating activities begins with net income.

indirect

Cash transactions involving the purchase and sale of long-term assets and current investments are classified on the statement of cash flows as BLANK activities.

investing

The purchase and sale of long-term assets and current investments are classified as

investing

Diamond Company's land account decreased by 10 million. Cash received from sale of land

may be higher or lower than $10 million

The starting point for preparing the operating activities section using the indirect method is:

net income

Dividends received are classified as operating activities cash flows, while dividends paid are classified as financing activities cash flows because dividends received increase _____, and dividends paid decrease ____.

net income; retained earnings

Transactions reported on the statement of cash flows that do not increase or decrease cash, but that result in significant investing and financing activities are referred to as BLANK activities.

non-cash

BLANK activities include cash receipts and cash payments for transactions relating to revenue and expense activities.

operating

Cash receipts and cash payments for transactions relating to revenue and expense activities are classified on the statement of cash flows as

operating activities

The statement of cash flows classifies items as

operating, investing, and financing.

The financial statement that provides information about cash receipts and cash disbursements for the period is the

statement of cash flows.

In a statement of cash flows, the sum of cash inflows and outflows is equal to

the change in the cash balance.

True or false: If a company chooses to prepare the operating section of the statement of cash flows using the direct method, it must also report using the indirect method.

true

Kleister Company issues bonds for $100 million and repays a long-term notes payable of $10 million. The company also sells its own shares for $12 million and pays cash dividends of $5 million. Cash inflows from financing activities will be:

$112 million

Munster Company reports the following net cash in its statement of cash flows: net inflow from operating activities: $200; net outflow from investing activities: $300; net outflow from financing activities: $50. The ending balance in cash is $20; the beginning balance must have been

$170 20 - 200 + 300 + 50

Carola Inc. issues common stock for $20 million and pays dividends of $2 million. Net cash inflows from financing activities will be:

$18 million

Norbert Company reports the following net cash in its statement of cash flows: net inflow from operating activities: $200; net outflow from investing activities: $220; net inflow from financing activities: $130. The current year beginning balance of cash was $80. The cash balance at the end of the year will be

$190

The statement of cash flows provides information about the cash inflows and cash outflows of an entity. For financing activities, a cash BLANK occurs when cash is borrowed from a creditor, and a cash BLANK occurs when a loan is repaid.

1. Inflow 2. Outflow

The statement of cash flows provides summary information about cash BLANK and cash BLANK during the year.

1. Inflow 2. Outflow

Noncash items, nonoperating items, and changes in current assets and liabilities are necessary adjustments to BLANK BLANK to prepare the operating section for the indirect format of the statement of cash flows.

1. Net 2. Income

Under the indirect method of preparing the statement of cash flows, depreciation expense is added back to net income because it

1. did not require an outflow of cash. 2. was subtracted in deriving net income.

The two acceptable methods for U.S. GAAP for reporting cash flows from operating activities are the BLANK method and the BLANK method.

1. indirect 2. direct

The purchase of equipment is a cash BLANK from BLANK activities, whereas the sale of land is a cash BLANK from BLANK activities

1. outflow 2. investing 3. inflow 4. investing

Joann is preparing a statement of cash flows as part of a homework assignment. She hopes to find a check figure that will help her assess the accuracy of her results. What should Joann do to quickly find a check figure?

Calculate the change in the beginning and ending balance of cash

Which of the following would result in a cash outflow from investing activities?

Purchase of a machine for cash.

One of the purposes of adjusting net income for changes to certain balance sheet accounts is to

convert items included in net income to cash.

True or false: Every time land is sold, the line item for the sale of land in the investing activities section of the Statement of Cash Flows will equal the change in the asset account on the balance sheet.

false

Depreciation expense and amortization expense represent BLANK items requiring adjustments to net income under the indirect method.

non cash

A decrease in accounts payable represents a cash ______ from operating activities, whereas a decrease in accounts receivable represents a cash _____ from operating activities.

outflow; inflow

Arlington Inc.'s income statement showed net income of $57,600 and depreciation expense of $9,200. Accounts receivable increased $3,750, Inventory increased $3,200, Supplies decreased $500, Accounts payable increased $2,700 and Salaries payable decreased $1,900. Arlington's net cash flows from operating activities was $.?

$61150

Western Inc.'s income statement showed net income of $60,000 and depreciation expense of $10,000. Accounts receivable decreased $3,000, Inventory increased $4,000, Supplies increased $1,000, and Accounts payable increased $3,000. Western's net cash flows from operating activities was ______.

$71,000

Dividends BLANK are classified as operating activities cash flows, while dividends BLANK are classified as financing activities cash flows.

1. received 2. paid

Noncash investing and financing activities are either:

1. reported in the notes to the financial statements 2. reported directly after the statement of cash flows

When cash from operating activities is presented using the indirect method, net income must be adjusted for increases and decreases in balance sheet accounts that relate to

amounts presented in the income statement.

Kleister Company issues bonds for $100 million and repays a long-term notes payable of $10 million. The company also sells its own common shares for $12 million and pays cash dividends of $5 million. Which of the following are cash outflows from financing activities?

1. repayment of notes payable 2. payment of cash dividends

Roberts Inc. sells common stock for $10 million and pays dividends of $1 million. Net cash inflows from financing activities will be:

$9 million

True or False: Collection on account and sale of services for cash are considered cash inflows, while payment on account and payment of salaries are considered cash outflows from operating activities.

true


Conjuntos de estudio relacionados

Chapter 12 - Financial Statement Analysis

View Set

GEOG_3153_Quiz 03-the American Conservation Movement to 1914

View Set

IV. Heat and Mass Transfer Properties

View Set

Pathology Chapters 7-9 Case Studies

View Set

Chapter 23 The Respiratory System

View Set

Economics California Topic 4 Quick Study Guide

View Set