ACCT: Chpt 12

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In​ 2017, Forever​ Young, Inc. sold land for $ 80 comma 000$80,000 ​cash, purchased equipment for $ 16 comma 000$16,000 cash and issued bonds for $ 80 comma 000$80,000 cash. The Net cash provided by investing activities​ is:

$64,000

Which of the following terms appears on a statement of cash flows​ - indirect​ method?

Depreciation Expense

On the statement of cash​ flows, the exchange of stock for land would be reported as which of the​ following?

Noncash investing and financing activities

The statement of cash flows is presented for a period of time. T/F

TRUE

On an indirect method statement of cash​ flows, an increase in accounts payable would be

added to net income in the operating activities section.

A good predictor of future cash flows​ includes:

cash receipts and cash payments in the current year.

A statement of cash flows accomplishes all of the following​ EXCEPT:

lists revenues and expenses.

Under the indirect method of preparing the statement of cash​ flows, the starting point to determine Net cash provided by operating activities​ is:

net income

A statement of cash flows reports the cash inflows and cash outflows for a company at a point in time. T/F

FALSE

Of the three types of business activities reported on a statement of cash​ flows, investing activities are the most important when evaluating a business. T/F

FALSE

On the statement of cash​ flows, activities that create​ long-term liabilities are usually

Financing Activities

On the statement of cash​ flows, activities that obtain the cash needed to launch and sustain a company are

Financing Activities

Paying off bonds payable is reported on the statement of cash flows under

Financing Activities

On the statement of cash​ flows, activities affecting​ long-term assets are

Investing Activities

Selling equipment for cash is reported on the statement of cash flows under

Investing Activities

On an indirect method statement of cash​ flows, a gain on the sale of plant assets would be

deducted from net income in the operating activities section.

On an indirect method statement of cash​ flows, an increase in a prepaid insurance would be

deducted from net income.

Under the direct method of preparing the operating section of the statement of cash​ flows, net cash provided by financing activities is​ $498,000. If the indirect method of preparing the statement of cash flows was​ used:

net cash provided by financing activities would be the​ same, $498,000.

Using the indirect method to prepare the statement of cash​ flows, an increase in accounts receivable is subtracted from net income in calculating Net cash provided by operating activities. T/F

TRUE

All except which of the following activities are reported on the statement of cash​ flows?

Marketing Activities

The sale of land for cash would be classified as a cash inflow from an operating activity on the statement of cash flows. T/F

FALSE

The sale of inventory for cash is reported on the statement of cash flows under

Operating Activities


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