Ch 11

Which of the following accounts results in adjustments to net income under the indirect method of preparing the statement of cash flows if their balances change during the year?

Accounts payable Accounts receivable Inventory

Which of the following items are classified as cash outflows from operating activities on the statement of cash flows?

Interest paid on bonds purchase of supplies payment on account payable

Which of the following are cash inflows from financing activities?

Issuance of common stock to investors Borrowing from bank Issuing stock to investors for cash Issuance of bonds

Which of the following are nonoperating items that require adjustments under the indirect method?

Losses on the sale of long-term assets Gains on the sale of long-term assets

Adjustments to net income in calculating operating cash flows include:

Nonoperating items Noncash items Changes in current assets and current liabilities

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

Operating

Which of the following are cash outflows from financing activities?

Pay dividends Repay borrowing from bank

Which of the following would be reported as a cash outflow from financing activities?

Purchase of treasury shares

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

amortization expense depreciation expense

Which of the following represents the first step in preparing a statement of cash flows in the correct order?

calculate the net cash flows from operating activities

Which of the following represents the final step in preparing a statement of cash flows in the correct order?

combine operating, investing, and financing activities

Cash flows from ___ 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 ___ activities.repayment of notes payable payment of cash dividends

financing

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

financing

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

inflow outflow

Cash flows from ___ activities are both outflows and inflows of cash related to the acquisition and disposal of long-term assets.

investing

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

investing

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

investing activities.

In order to determine cash flows from financing activities, we need to examine changes to

long-term liability and stockholders' equity accounts

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

net income

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

net income

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

Gains and losses on the sale of long-term assets represent common ___ items needing adjustment under the indirect method.

non operating

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

noncash

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.

Which of the following items are classified as cash outflows from operating activities on the statement of cash flows?

payment of salaries payment on account

Which of the following items are classified as cash outflows from operating activities on the statement of cash flows?

payment on account payment of salaries

Which of the following items are classified as cash outflows from operating activities on the statement of cash flows?

payment on account payable Interest paid on bonds purchase of supplies

Which of the following items are classified as cash outflows from operating activities on the statement of cash flows?

payment on account payable purchase of supplies Interest paid on bonds

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

received paid

Changes to current assets and current liabilities require adjustment of net income under the indirect method because

related cash may be higher or lower than the accrued amount included in net income

Which of the following transactions would be classified as financing activities in the statement of cash flows?

repayment of a long-term loan payment of cash dividends issuance of bonds sale of the company's common stock Repurchase of the company's own common stock

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?

repayment of notes payable payment of cash dividends

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.

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 mill

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

investing activities. operating activities. financing activities.

Which of the following items are classified as cash inflows from operating activities on the statement of cash flows?

Collection from customers Collection of interest Interest received on notes receivable Collection from customers

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

Purchase of a machine for cash.

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

Sale of a machine for cash.

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 are cash outflows from financing activities?

Repay borrowing from bank Pay dividends

Which of the following are cash outflows from financing activities?

Repayment of note payable Payment of dividends

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

financing