Exam 11: The Statement of Cash Flows

In order to prepare a Statement of Cash Flows using the indirect method,you need the Income Statement only.

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:

An example of a cash inflow from financing activities is:

Over time,if the cash conversion cycle for a business grows longer,this is an indication that they are holding cash too long.

Caesario Company's Accounts Receivable increased by $35,000 and their Accounts Payable decreased by $18,000.What is the net effect on cash from operations under the indirect method?

Under the direct method,paying and collecting interest on loans are:

Changes in all current assets EXCEPT ________ are adjustments to net income in the operating section of an indirect cash flow statement.

In the direct method,each line of the Income Statement is converted from the accrual basis to cash basis.

Under the indirect method,which of the following is NOT a proper adjustment to net income under operating activities?

A purchase of new equipment on a note payable under the direct method would be reported:

A transaction acquiring land by issuing a note for the full purchase price would not appear on the cash flow statement because no cash was involved,but it may be disclosed in a separate section.

When comparing net cash provided by operations using the direct method versus indirect method,we find that:

The Vintage Boutique had net income of $50,000.Accounts Receivable increased by $30,000;inventory decreased by $20,000;amounts payable increased by $4,000 and salaries payable decreased by $1,000.The amount of cash flow from continuing operating activities under the indirect method is:

Operating activities reflect such things as purchasing fixed assets.

When a corporation receives dividends,they are shown as a(n):

Sterling Sails 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:

A decrease in a current liability causes an increase in cash.

Which of the following is NOT a cash inflow or outflow from an investing activity?

TLR Productions' Accounts Receivable increased by $48,000 and its Accounts Payable increased by $27,000.What is the net effect on cash from operations under the indirect method?

Even though depreciation,depletion and amortization are expenses,they are considered non-cash transactions and must be subtracted from net income in the operating activities section of an indirect method cash flow statement.