Exam 12: The Statement of Cash Flows

Which of the following statements is false?

Which of the following is not a current reporting requirement for a statement that reports changes in cash over a period of time?

Which of the following items is not a cash equivalent?

Some companies use a work sheet approach, which functions like the T account 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 would be reported on a statement of cash flows if the operating activities section is prepared using the direct method. -Paid employee salaries and wages.

Which category of cash flows - operating, investing, or financing activities - do you think is most likely to have a net cash outflow over a number of years? Explain.

Use the selected information from the statement of cash flows for three actual companies for the last three years to answer the questions that follow. REQUIRED: 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?

are items which are readily convertible into a known amount of cash and have an original maturity to the investor of three months or less.

Under the , a company reports its major classes of gross cash receipts and cash payments in the operating activities section of 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. -Received cash from the sale of securities.

When using the direct method, how is the collection of cash from customers shown on the statement of cash flows?

Cash flows from acquiring and selling products are classified as

If a company reports a net loss for the year, is it still possible that cash could actually increase during the year? Explain your answer.

Under the indirect method, the first line in the operating activities section of the statement of cash flows is the net income or loss for the period.

activities involve long-term liabilities and stockholders' equity.

Which of the following activities is most likely to have a cash flow effect?

When using the indirect method, how would the retirement of bonds payable at their maturity date be shown on the statement of cash flows?

A work sheet is an alternative to T accounts to help in the preparation of a statement of cash flows.

The issuance of common stock in exchange for a building would appear both as a cash inflow in the financing activities section of the cash flow statement and also as a cash outflow in the investing activities section.

Twilight Corp. began the year with a balance in its Income Taxes Payable account of $13,000. The year-end balance in the account was $18,000. The company uses the indirect method in the Operating Activities section of the statement of cash flows. Therefore, it presents the amount of income taxes paid at the bottom of the statement as a supplemental disclosure. The amount of taxes paid during the year was $15,000. REQUIRED: What amount of income tax expense will appear on Twilight's income statement?