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