Exam 12: 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. -Purchased store equipment for cash.

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. -Recorded depreciation expenses for the year.

When using the direct method, how is the payment of a cash dividend shown on the statement of cash flows?

Under the indirect method, a loss from the retirement of bonds is _________________________ to net income in the operating activities section of the statement of cash flows.

The statement of cash flows summarizes the operating, investing, and financing activities of a business for a period of time.

The statement of cash flows

Issuance of stock results in cash inflows that appear in the financing section of the statement of cash flows.

Which of the following is an addition to net income when the indirect method is used?

When using the direct method, how is the issuance of stock for cash shown on 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 interest on bonds.

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. -Received payments from credit sales.

A decrease in retained earnings indicates that a cash dividend has been paid.

When using the indirect method, how is depreciation expense recorded on the statement of cash flows?

Net income was $61,000 for the year.The accumulated depreciation balance increased by $14,000 over the year.There were no sales of fixed assets or changes in noncash current assets or liabilities.Under the indirect method, the cash flow from operations is $47,000.

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. -Increased the accounts receivable balance.

When using the indirect method, how is an increase in accounts receivable during the year shown on the statement of cash flows?

When using the direct method, how is the purchase of equipment for cash shown on the statement of cash flows?

Parks Company reported an increase of $370,000 in its accounts receivable during the year 2016.The company's statement of cash flows for 2016 reported $1 million of cash received from customers.What amount of net sales must Parks have recorded in 2016?

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

The Financial Accounting Standards Board (FASB) has expressed a strong preference for the indirect method, but allows companies to use the direct method in calculating the cash flow from operating activities.