16 Statement of Cash Flows Flashcards
Although bonds payable is a financing activity, payment of interest is reported on the statement of cash flows as a?
operating cash flow
If an entity uses the indirect method to present its statement of cash flows, what must be included in the disclosures?
Interest paid (excluding capitalized amounts) and income taxes paid
Investing activities exclude which transactions in a statement of cash flows?
cash equivalents and certain loans or other debt of equity instruments acquired specifically for resale in the short-term. These transactions are classified as operating activities.
How do you calculate cash collected from customers?
beginning accounts receivable + sales - ending accounts receivable = cash collected from customers
How do you calculate interest paid during the period?
beginning interest payable + interest expense (on the accrual basis) - ending interest payable = interest paid during the period
How do you calculate cash paid to suppliers?
beginning accounts payable + purchases (on the accrual basis) - ending accounts payable = cash paid to suppliers
How do you calculate expenses paid during the period?
ending prepaid expenses + current-period expense (on the accrual basis) - ending prepaid expenses = expenses paid during the period
The indirect method of presenting the cash flows statement is also called?
the reconciliation method
Under the indirect method of presenting a statement of cash flows, what is required to be provided in a supplemental disclosure?
Interest paid net of amounts capitalized and income taxes paid
How do changes in current operating liabilities affect net income?
increase in current operating liabilities = added to net income
decrease in current operating liabilities - subtracted from net income
How do current operating assets affect net income?
Decrease in current operating assets = added to net income
increase in current operating assets = subtracted from net income
