Exam 21: Statement of Cash Flows

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

If Salaries Payable increased, the amount of the increase would result in what computation to Salaries Expense?

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

Cost of merchandise sold for the year was $760,000. Inventories were $20,000 and $110,000 at the beginning and end of the year, respectively. There were no changes in accounts payable from the beginning to the end of the year. Cash payment for merchandise to be reported on the cash flow statement using the direct method is:

Which of the following adjustments would be in error when computing cash from financing using the indirect method?

Operating cash flow activities deal with which types of accounts?

The distinction between the indirect and direct methods only applies to the cash flows from which section?

How would the purchase of land affect the statement of cash flows investing section-indirect method?

An increase to Accounts Receivable results in what condition?

Under the direct method, cash payments are outflows of cash, and any change with a positive cash effect is:

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

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) ________ Issued common stock for equipment trade b) ________ Acquired building for cash c) ________ Purchase equipment on account d) ________ Declared a cash dividend e) ________ Purchased supplies with cash f) ________ Received payment on account g) ________ Borrowed money by issuance of a long-term debt h) ________ Purchased equipment on account to be paid within one year

Blair Corporation's Accounts Receivable decreased by $15,000 during the year. What is the adjustment to the cash flow statement when it is prepared by the indirect method?

Which of the following would be included in the net cash flows from operating activities section of a cash flow statement using the indirect method?

Identify where each of the following transactions would be shown on the statement of cash flows when it is prepared by the indirect method. Identify each transaction as an operating activity (O), an investing activity (I), a financing activity (F), or transaction that is not reported on the statement of cash flows (N). a) ________ Paid for fire insurance in advance b) ________ Cash used to purchase new computers c) ________ Cash used to retire bonds outstanding d) ________ Depreciation expense e) ________ Cash used to purchase fixed assets f) ________ Cash proceeds from sale of the company's own stock g) ________ Bought back own stock h) ________ Received cash dividends

Under the direct method, cash receipts are inflows of cash, and any change with a negative cash effect is:

Discuss the purpose of a statement of cash flows and describe its components.

Under the indirect method, net income is considered the primary source of cash from financing activities.

Collins Corporation reported net income of $45,000; depreciation expenses of $20,000; a decrease in Accounts Payable of $2,000; and an increase in Accounts Receivable of $4,000. Net cash flow from operating activities using the indirect method is:

When a corporation purchases a building for cash, it: