ACC201 U6

Which of the following statements is true regarding the preparation of the statement of cash flows prepared?

-IDK Wrong answer: It may be combined with the statement of financial position. Wrong answer: It may be combined with the statement of financial position.

When preparing the statement of cash flows, changes in the current asset and current liability accounts are distinguished and presented on the statement of cash flows as

-IDK Wrong answer: financing activities.

When preparing the statement of cash flows, the purchase of held-to-maturity debt investments would be reported on the statement of cash flows as:

Investing activities.

A company's free cash flow is usually computed as its

Net cash provided by operating activities less cash payments earmarked for investments in PPE.

HT Pte. Ltd. reported profit for the year in excess of its net cash flow from operations. Analyse which of the following is a possible explanation for this difference:

Non-operating gains.

When preparing the statement of cash flows, the category of cash flows that creates sales revenues and matching expenses is generally distinguished and reported on the statement of cash flows as:

Operating activities

The three types of activities reported and distinguished on the statement of cash flows are:

Operating, investing and financing.

Which of the following would be reported on a prepared statement of cash flows as an investing activity?

Sale of equipment for cash.

The financial statement which is prepared to identify cash activity (receipts and disbursements) during the accounting period is called a(n):

Statement of cash flows.

When preparing cash flows from operating activities, which of the following transactions would increase the net cash flow from operating activities?

The collection of an account receivable from a customer.

When preparing the statement of cash flows, cash received from the issuance of bonds would be distinguished and reported on a statement of cash flows under:

The financing activities.

An important distinction between the direct method and the indirect method of preparing a statement of cash flows is that:

The format of the section computing net cash flow from operating activities is different under the two methods.

The following purposes have been identified to be a purpose of the statement of cash flows except for:

To assess the collectability of accounts receivable.

Cash received from customers would be distinguished and reported on the statement of cash flows:

Under operating activities.

For purposes of preparing a cash flow statement, which of the following is not likely to be identified as a "cash equivalent"?

An investment in a firm's long-term bonds.

When preparing cash flow statements, note that highly liquid short-term investments that are easily convertible into cash are identified as:

Cash equivalents

When preparing the statement of cash flows, the purchase of treasury shares with cash would be reported as:

Cash outflow under the financing activities

The following data is provided for the current year. Net income is $210,000. Current receivables increased by $12,000 while current payables decreased by $8,000. Assuming no other activity, when preparing the statement of cash flows using the indirect method, the cash flows from operating activities will be:

$190,000