SB #9 ch 11

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

-receipt of interest -collection from customers

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 flow as ___ activities

Financing

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

Inflows; outflows

Which of the following are non-operating items that require adjustments under the indirect method?

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

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

Purchase of a machine for cash

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

Statement of cash flows.

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

financing

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

net income

The statement of cash flows classifies items as

operating, investing, financing

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

sale of a machine for cash

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

Collection of interest Collection from customers

Noncash items, non-operating 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 a statement of cash flows, the first amount listed is ___ ___.

Net income

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

Adjustments to net income in calculating operating cash flows include:

Noncash items Changes in current assets and current liabilities Non-operating items

___ 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

Which of the following items are classified as cash out flows 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

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

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

List the four steps in preparing a statement of cash flows in the correct order

Calculate the net cash flows from operating activities Determine the net cash flow's from investing activities Determine the net cash flows from financing activities Combine operating, investing, and financing activities

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

Combining operating, investing, and financial activities.

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

Depreciation expense Amortization expense

Which of the following statements best describes the reason depreciation expense is added to net income when preparing a statement of cash flows?

Depreciation expense originally reduced net income, but the expense does not involve paying cash

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

Financing

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

Financing, investing, and operating activities

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?

Inventory Accounts payable Accounts receivable

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

Investing

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

Investing

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

The change in The cash balance

Depreciation expense is added back to net income when preparing the cash flow from operating activities section because depreciation represents a(n) ___ reduction to net income.

noncash