Chapter 12 Accounting

The format of a statement of cash flows includes reporting cash flows from three activities including:

- Investing - Operating - Financing

Which of the following transactions would not be classified as an operating activity on the statement of cash flows?

Cash dividends paid to shareholders

Which of the following items would not be adjusted to net income when computing cash flows from operating activities, using the indirect method?

Cash received from sale of building

Which of the following would not be reported under financing activities on the statement of cash flows?

Cash received from sale of plant assets

Accountants can use a three-step process to determine cash provided (or used) by investing activities. Which of the following steps is not part of this process?

Identify adjustments to net income.

Which of the following would be included in the operating section when preparing the statement of cash flows using the indirect method?

Net Income

Which of the following items would not be a correct adjustment to net income to arrive at cash flows from operating activities, using the indirect method?

Subtract increase in taxes payable

Information on the statement of cash flows helps users answer all of the following questions except:

Why did the company invest in long-term assets?

A loss from the sale of an investment would be (added/subtracted) _________ added, to (from) net income when computing cash flows from operations, using the indirect method.

added

Investing activities are affected by

changes in long-term assets.

The net cash amount provided by operating activities is identical under both the ____________ and _______________ methods.

direct indirect

Collecting money for notes receivable would be reported on the statement of cash flows as a(n) __________ activity.

investing

In a statement of cash flows, cash received from the sale of a building would be classified under "cash flows from _______________ activities.

investing

In addition to analyzing the cash account, a second approach to preparing the statement of cash flows is to explain changes in cash by analyzing changes in

liability accounts Equity accounts Noncash assets accounts

A(n) _______ occurs when the receipts in a category exceed the payments.

net cash inflow

A gain from the sale of a building would be (added/subtracted) ________________ to (from) net income when computing cash flows from operations, from operations, using the indirect method.

subtracted