Exam 5: Financial Position and Cash Flows

Which of the following is NOT a required supplemental disclosure for the balance sheet?

The "Disclosure Initiative-Amendments to IAS7" issued by the IASB in January 2016 proposes

In a statement of cash flows, proceeds from issuing equity instruments should be classified as cash inflows from

Statement of cash flows basic format Illustrate the basic format of the statement of cash flows.

Statement of cash flows - direct method The controller of Nebula Corporation has provided you with the following information: $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Nebula Corporation $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Income Statement $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ For the Year Ended December 31, 2020 Net sales..................................................... \6 20,000 Operating expenses..................................... Income from operations................................ 210,000 Other revenues and expenses Gain on sale of equipment........................... 30,000 Interest expense ......................................... 8,000 Income before income taxes........................ 232,000 Income taxes.............................................. Net income.................................................. $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Nebula Corporation $\quad$$\quad$$\quad$$\quad$$\quad$ Comparative Account Information $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Relating to Operations $\quad$$\quad$$\quad$$\quad$ For the Year Ended December 31, 2020 Accounts receivable 56,000 40,000 Prepaid insurance 5,000 6,000 Accounts payable 59,000 47,000 Interest payable 600 1,500 Income taxes payable 4,200 6,000 Unearned revenue 20,000 14,000 Instructions Prepare a statement of cash flows (for operating activities only) for the year ended December 31, 2020, using the direct method.

Financial instruments do NOT include

In preparing a statement of cash flows, repurchase of a company's own shares at an amount greater than cost would be classified as a(n)

Generally, as financial flexibility increases, the risk of enterprise or business failure will

Monetary assets represent

Current liabilities Define current liabilities without using the word "liability."

The statement of financial position is useful for all of the following EXCEPT to

SingSong Corporation reports the following information: Net income............................................... \7 20,000 Depreciation expense................................ 210,000 Increase in accounts receivable.................. 90,000 SingSong should report cash provided by operating activities of

Limitations of the statement of financial position The statement of financial position has many limitations. One of these limitations is that it necessarily leaves out many items. Of greatest concern to investors are omitted liabilities. Explain why some liabilities are left off the statement of financial position, and how investors can identify and measure potentially omitted items.

IFRS Practice Statement 2 IFRS Practice Statement 2 (PS2) was issued in September 2017 and provides (non-mandatory) guidance for reporting entities to consider. Given that information is material if its omission or misstatement could influence financial information users' decisions, identify the four-step process for assessing materiality suggested by PS2.

The cash debt coverage ratio is calculated by dividing net cash provided by operating activities by

A statement of cash flows prepared under the DIRECT method starts with

Which of the following facts concerning depreciable assets should be included in the summary of significant accounting policies? Depreciation Method Composition a) No Yes b) Yes Yes c) Yes No d) No No

Which of the following is NOT included in a statement of cash flows prepared under the DIRECT method?

Some companies following IFRS list current assets in

Liquidity, solvency, and financial flexibility Explain the relation between the concepts of liquidity, solvency and financial flexibility.