Exam 11: The Statement of Cash Flows

Sterling Sails reported net income of $30,000; depreciation expenses of $19,000; 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:

Cost of goods sold for the year was $660,000. Inventory was $83,000 at the beginning of the year and $37,000 at the end of the year. There were no changes in the amount in account payable for the year. Cash payment for merchandise to be reported under the direct method is:

A transaction involving the exchange of stock for land would be classified as a(n):

When preparing the Statement of Cash Flows by the indirect method, if current liabilities increase, the difference is:

Which would NOT be subtracted from net income in the operating section of an indirect cash flow statement?

Business transactions that do NOT involve the payment or receipt of cash are considered to be non-cash transactions.

Gains on the sale of long-term assets are:

The cash flow statement and Balance Sheet use accrual accounting.

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

The Statement of Cash Flows is prepared to show why the cash amount changed from the beginning of the period to the end of the period.

A transaction that exchanged a building for shares of stock would be an investing activity and would appear on the cash flow statement.

Changes in long-term liabilities belong in the financing section of a cash flow statement using the indirect method.

A comparative Balance Sheet details why the ending cash balance increased or decreased.

The Cash balance has decreased during the year. How would this affect the Statement of Cash Flows operations section under the indirect method?

Operating activities are transactions and events associated with selling a product or providing a service related to the: