Exam 11: The Statement Of Cash Flows

Use the following codes to indicate how the cash flow effect, if any, of each transaction or event would be reported on a statement of cash flows if the operating activities section is prepared using the indirect method. (Choices may be used more than once.) -Recorded depreciation expenses for the year.

Many companies use software such as Microsoft PowerPoint to construct their cash flow statements.

McCullow Investment Group One of the firm's financial analysts is assessing the performance of three particular companies whose cash flow statements for the last three years are presented below: -Refer to McCullow Investment Group. What is meant by the term "cash flow adequacy"? What other financial information would be necessary in order to make a determination of the cash flow adequacy for these three companies?

A decrease in retained earnings represents dividends that were ____________________ during the period, not necessarily those that were paid.

Metz Vets The company’s accountant prepared this reminder for his intern: Cash = CL + LTL + CS + RE ? NCCA ? LTA where: CL = Current liabilities LTL = Long-term liabilities CS = Common stock RE = Retained earnings NCCA = Noncash current assets LTA = Long-term assets -Refer to Metz Vets. Which of the following activities results in a cash outflow?

During the current year, the accounts receivable balance increased.

Under the indirect method, instead of reporting cash receipts and payments, net income is reconciled with net cash from operating activities.

A company reported the following information in its annual report for the current year. Compute the cash flow adequacy ratio for the current year.

____________________ represents the cash flow that a company is able to generate after considering the maintenance or expansion of its assets (capital expenditures) and payment of dividends.

Maritime Marine Services Selected data from the financial statements for the years ended December 31, 2020 and 2019, are presented below: The following additional information was obtained from the company's records: -Refer to Maritime Marine Services. What was the cost of investments purchased during 2020?

Increases in Cash = Increases in Liabilities + Increases in Stockholders' Equity + Decreases in Noncash Assets.

If the December 31, 2019, balance of accounts payable is lower than the January 1, 2019, balance, then the amount of cash payments will exceed the purchases on account for the year.

Mercury Corporation reported the following information on its financial statements: If the company uses the indirect method to prepare the operating activities section of the statement of cash flows, what amount will be reported as net cash inflow from operating activities for 2020?

Some companies use a work sheet approach as a tool to aid in preparing the statement of cash flows.

Use the following codes to indicate how the cash flow effect, if any, of each transaction or event would be reported on a statement of cash flows if the operating activities section is prepared using the indirect method. (Choices may be used more than once.) -Declared cash dividends.

Which of the following statements is false?

Memorial Corporation Information from the financial records is presented below: -Refer to Memorial Corporation. Assume that there were no retained earnings transactions other than those dealing with dividends and net income. Dividends declared during 2020 totaled

If the December 31, 2019, balance of accounts receivable is lower than the January 1, 2019, balance, then the amount of cash collections will be more than the sales on account for the year.

Maritime Marine Services Selected data from the financial statements for the years ended December 31, 2020 and 2019, are presented below: The following additional information was obtained from the company's records: -Refer to Maritime Marine Services. What was the cost of the property, plant and equipment which was disposed of during 2020?

Because the cash received from the sale of long-term assets is reported in the investing activities section of the statement of cash flows, any gain or loss is ignored when reporting the cash flow from operating activities under the indirect method.