Exam 21: Statement of Cash Flows

The section of the statement of cash flows from investing activities includes:

When using the direct method to determine the net cash flows from operating activities,major categories would include:

Activities that increase and decrease as a result of selling a company's stock are:

The board of directors is considering approving a plant expansion which will require a sizable advance payment to take place early this year.How will this decision affect the period's cash flows from investing?

The following information is given for Tripp Company,which uses the indirect method. Net income \ 30,000 Depreciation expense 5,000 Increase in accounts receivable 4,000 Payment of dividends 2,000 Proceeds from sale of equipment 7,000 Increase in accounts payable 5,000 Decrease in inventory 3,000 From the information provided,answer the following questions: a)The cash flow from operating activities is ________. b)The cash flow from investing activities is ________. c)The cash flow from financing activities is ________.

Management has authorized the purchase of a large quantity of inventory for early December.The purchase will have credit terms of 2/10,n/30,and they will authorize payment by the discount date.How will this decision affect the period's cash flows from operations-indirect method?

The statement of cash flows provides information about all of the following except:

Cash flows from financing activities would include:

The Accounts Receivable balance has decreased during the year.How would this event affect the statement of cash flows operations section-indirect method?

Land costing $60,000 was sold for $50,000.What was the effect on the investing activities?

Rick Corporation's Accounts Receivable increased by $25,000 during the year.What is the adjustment to the cash flow statement when it is prepared by the indirect method?

Smith Corporation reported net income of $54,000,depreciation expenses of $10,000,an increase in Accounts Payable of $3,000 and a decrease in Accounts Receivable of $1,500.Under the indirect method,net cash flow from operating activities is:

Issuance of common stock for cash would result in:

Indicate the effect that each of the following transactions has on the cash balance.Use (I)for increase, (D)for decrease,and (N)for no change. a)________ Increase in inventory,paid with cash b)________ Sale of common stock for cash c)________ Payment of dividends d)________ Depreciation expense for the period e)________ Payment of long-term debt f)________ Loan of money to another company g)________ Increase in Accounts Payable h)________ Purchase of equipment on account

The direct method must be used to report cash flows from operating activities in the statement of cash flows.

The accuracy of the statement of cash flows,regardless of method used,can be verified by computing the change in the balance of:

Changes in current assets and current liabilities accounts deal with financing activities.

The final cash amount on the statement of cash flows does not have to match the cash balance shown on the balance sheet.

For each of the following items, indicate (by placing an X) whether the item would be found on the statement of cash flows in column 1, the direct approach for determining the cash flows from operating activities, column 2, the indirect approach for determining the cash flows from operating activities, column 3, cash flows from investing activities, column 4, cash flows from financing activities. If you identify that an item affects the cash flows from operation, indirect method, also indicate whether it will be increasing (+) or decreasing (-) the cash flows. - Col 1 Operating Direct Col 2 Operating Indirect Col 3 Investing Col 4 Financing Increase in inventory

Under the direct method,each line of the balance sheet is converted to cash paid or received.