A303 Final

Noncash expenses and noncash revenues from net income.

Net cash flow from operating activities is determined by eliminating?

Were all the cash expenditures of benefit to the company during the period?

Of the following questions, which one would not be answered by the statement of cash flows?

Indirect method

The method of calculating net cash flow from operating activities that adjusts net income for items that affected reported net income but not cash is the:

Direct method

The method of calculating net cash flow from operating activities that results in the presentation of a condensed cash receipts and cash disbursements statement is the:

About the cash receipts and cash payments of an entity during a period.

The primary purpose of the statement of cash flows is to provide information

Both the direct and indirect methods

The reconciliation of net income to net cash flow from operating activities is reported under:

Last years income statement

The sources of information used to prepare the statement of cash flows includes all of the following except:

Eliminating the effects of income statement transactions that did not result in a corresponding increase or decrease in cash.

To arrive at net cash provided by operating activities using the indirect method, it is necessary to report revenues and expenses on a cash basis. This is done by?

False, increases in current assets, represented by the increase in short-term notes receivable, are deducted from (not added to) net income in the operating activities section.

True or False: An increase in short-term notes receivable will be added to net income under the indirect method of preparing the statement of cash flows.

False, preparation of the statement of cash flows requires the comparative balance sheet, the current year's income statement, and selected transaction data.

True or False: Only the comparative balance sheet is needed to prepare the statement of cash flows.

False, under the direct method, a loss on the sale of long-term investments would not be shown on a statement of cash flows.

True or False: Under the direct method, a loss on the sale of long-term investments would be shown in the operating activities section.

Sales revenues - Increase in accounts receivable

Under the direct method of preparing the statement of cash flows, cash receipts from customers is equal to:

Plus an increase in inventory and minus an increase in accounts payable.

Under the direct method, cash payments to suppliers equals cost of goods sold:

A change in dividends payable.

When preparing a statement of cash flows (indirect method), which of the following is not an adjustment to reconcile net income to net cash provided by operating activities?

Indirect

Which method adjusts net income for items that affected reported net income but did not affect cash?

Assess the effectiveness of management's borrowing policy.

Which of the following is not one of the benefits that creditors and investors can derive from the statement of cash flows?

Determine the change in cash

Which of the following is the first step in preparing the statement of cash flows?

The reconciling items shown in the worksheet are entered in a journal and posted to the appropriate accounts.

Which of the following statements related to a worksheet used for the preparation of a statement of cash flows is not correct?

Stock dividends declared

A statement of cash flows typically would not disclose the effects of

Significant noncash transaction.

A stock split is an example of

A noncash investing and financing activity.

Acquiring land and a building by issuing common stock would be reported as:

Operating activities

Activities involving the cash effects of transactions that enter into the determination of net income are:

An increase in accounts receivable

All of the following adjustments are added to net income in computing net cash flow from operating activities using the indirect method except:

Increase in accrued liabilities

All of the following adjustments would be deducted in determining net cash flow from operating activities using the indirect method except:

Interest paid of long-term debts

All of the following would be classified as financing cash flows except:

Receipt of cash dividends from investments.

All of the following would be considered investing activities except:

Addition to net income of $25,000 for loss on sale and a $150,000 for cash proceeds as an increase in cash flows from investing activities.

Ando Company sold some of its plant assets during 2017. The original cost of the plant assets was $500,000 and the accumulated depreciation at date of sale was $325,000. The proceeds from the sale of the plant assets were $150,000. The information concerning the sale of the plant assets should be shown on Ando's statement of cash flows (indirect method) for the year ended December 31, 2017, as a (n)