Exam 11: The Cash Flow Statement

Most businesses prefer to use the indirect method of formatting a cash flow statement.

If $10,000 was generated from operations (indirect method), $4,000 was used for investing activities, and $6,000 was generated from financing activities, the cash balance __________.

Acquisitions and sales of long-term assets belong in the __________ section of a cash flow statement using the indirect method.

When preparing the cash flow statement by the indirect method, if current liabilities increase, the difference is __________ to net income.

The cash conversion cycle depends upon the time it takes to sell merchandise inventory, to collect receivables, and to pay payables.

The section of the cash flow statement from investing activities does NOT include:

How is the reporting of cash on the balance sheet different from the reporting of cash on the cash flow statement?

Why is the operating activities section of the direct method cash flow statement just a cash-basis income statement?

What type of accounts do financing activities affect?

Casey Company reported net income of $35,000; depreciation expenses of $20,000; an increase in accounts payable of $2,000; and an increase in current notes receivable of $3,000. Net cash flows from operating activities under the indirect method is __________.

Which of the following is NOT a source of cash?

Transactions involving the purchase and sale of long-term assets, lending money, and collecting the principal on loans are called __________ activities.

What type of business activity would issuing stock be classified as on the cash flow statement?

What are the similarities between the direct and indirect methods?

Assume that Xavier Industries has an inventory turnover of 46 days, an accounts receivable turnover of 28 days, and an accounts payable turnover of 34 days. What is the cash conversion cycle for Xavier Industries? If the average cash conversion cycle for the industry is 45 days, is Xavier healthier or facing a pending cash flow "crunch" when compared to the industry average?

All current assets EXCEPT __________ are adjusted to net income in the operating section of an indirect cash flow statement.

Casey Company has an accounts receivable turnover of 36 days, an inventory turnover of 77 days, and an accounts payable turnover of 40 days. Casey's cash conversion cycle is:

Losses on the sale of long-term assets are __________ to __________ activities.

Identify the four financial statements and the purpose of each.

Cash payments for inventory is computed as "Total inventory purchased plus a decrease in Accounts payable OR minus an increase in Accounts payable."