Exam 21: Statement of Cash Flows

Changes in current assets and current liabilities accounts deal with financing activities.

A statement of cash flow's purpose is to:

When preparing the statement of cash flows by the indirect method, if accumulated depreciation increases the difference is:

If a company issues a comparative balance sheet showing the change in the cash balance, a statement of cash flows is not needed.

When preparing the statement of cash flows by the indirect method, if current assets have increased the difference is:

If equipment is sold for $50,000, it is shown in the financing activities section.

The statement of cash flows provides information about all of the following except:

Identify where each of the following transactions would be shown on the statement of cash flows when it is prepared by the indirect method. Identify each transaction as an operating activity (O), an investing activity (I), a financing activity (F), or transaction that is not reported on the statement of cash flows (N). a)________ Paid for fire insurance in advance b)________ Cash used to purchase new computers c)________ Cash used to retire bonds outstanding d)________ Depreciation expense e)________ Cash used to purchase fixed assets f)________ Cash proceeds from sale of the company's own stock g)________ Bought back own stock h)________ Received cash dividends

A transaction of issuance of stock in exchange for equipment would be recorded as a(n):

If Accounts Receivable decreases on a comparative balance sheet, this means:

If, on the comparative balance sheet, Accounts Payable has decreased, the amount of decrease would be:

For each of the following items, indicate (by placing an X)whether the item would be found on the statement of cash flows in column 1, the direct approach for determining the cash flows from operating activities, column 2, the indirect approach for determining the cash flows from operating activities, column 3, cash flows from investing activities, column 4, cash flows from financing activities. If you identify that an item affects the cash flows from operation, indirect method, also indicate whether it will be increasing (+)or decreasing (-)the cash flows. -

If $12,000 was generated from operations, $6,000 was used for investing activities, and $4,000 was provided by financing activities, the cash balance would:

Which of the following is a cash outflow from a financing activity?

Activities that pay and collect interest on loans are:

The statement of cash flows can be used for evaluating, comparing, and predicting future cash flows.

The balance of Supplies has decreased during the year. How would this event affect the statement of cash flows operations section-indirect method?

Operating activities deal with which types of accounts?

A statement of cash flows is helpful in:

Which of the following would be included in the net cash flows from operating activities section of a cash flow statement using the indirect method?