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CPA Exam - FAR > 1B Statement of Cash Flows > Flashcards

1B Statement of Cash Flows Flashcards

1
Q

3 Sections of a Statement of Cash Flows

A

Cash Flows

  1. Operating Activities
  2. Investing Activities
  3. Financing Activities
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2
Q

Operating Activities Inflows

  1. Cash Receipts from Customers
  2. Interest Received
  3. ???
A

Dividends Received

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3
Q

Operating Activities Inflows

  1. Cash Receipts from Customers
    2 ???????
  2. Dividends Received`
A

Interest Received

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4
Q

Operating Activities Inflows

  1. ?????
  2. Interest Received
  3. Dividends Received
A

Cash Receipts from Customers

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5
Q

Operating Activities Outflows

  1. Income Taxes Paid
  2. Interest Paid
  3. ????????
A

Cash payments to employees/venders

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6
Q

Operating Activities Outflows

  1. ????
  2. Interest Paid
  3. Cash Payments to employees/vendors
A

Income taxes paid

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7
Q

Operating Activities Outflows

  1. Income Taxes Paid
  2. ????
  3. Cash Payments to employees/vendors
A

Interest Paid

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8
Q

What kind of transactions go in Investing Activities of CFS??

  1. ?????
  2. lending cash
  3. receiving payment on loans
A

buy or sell long-term assets and investments for cash

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9
Q

What kind of transactions go in Investing Activities of CFS??

  1. buy or sell long-term assets and investments for cash
  2. ???????
  3. receiving payment on loans
A

lending cash

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10
Q

What kind of transactions go in Investing Activities of CFS??

  1. buy or sell long-term assets and investments for cash
  2. lending cash
  3. ?????
A

receiving payment on loans

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11
Q

Investing Activities Outflows

  1. Purchase of PPE
  2. Purchasing Equity Securities
  3. ?????
A

Loans made by company (lending out cash)`

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12
Q

Investing Activities Outflows

  1. Purchase of PPE
  2. ?????
  3. Loans made by company (lending out cash)
A

Purchasing Equity Securities

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13
Q

Investing Activities Outflows

  1. ?????
  2. Purchasing Equity Securities
  3. Loans made by company (lending out cash)
A

Purchase of PPE

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14
Q

Investing Activities Inflows

  1. Sale of PPE
  2. Sale of equity securities
  3. ?????`
A

Receive loan payments (For money you lent out)

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15
Q

Investing Activities Inflows

  1. Sale of PPE
  2. ?????
  3. Receive loan payments (for the money you lent out)
A

Sale of equity securities

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16
Q

Investing Activities Inflows

  1. ????
  2. Sale of equity securities
  3. Receive loan payments (for the money you lent out)
A

Sale of PPE

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17
Q

What are Financing activities???

A

Transactions involving external sources of funding

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18
Q

Financing Activities Inflows

  1. Cash Receipts from issuing stock
  2. Cash receipts from issuing bonds, notes, mortgages
  3. ??????
A

Sale of treasury stock

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19
Q

Financing Activities Inflows

  1. Cash Receipts from issuing stock
  2. ???????
  3. Sale of treasury stock
A

Cash receipts from issuing bonds, notes, mortgages

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20
Q

Financing Activities Inflows

  1. ?????
  2. Cash receipts from issuing bonds, notes, mortgages
  3. Sale of treasury stock
A

Cash Receipts from issuing stock

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21
Q

Financing Activities Outflows

  1. Payment of Dividends
  2. ?????
A

Payment of Bonds, notes etc. (The principal not the interest)

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22
Q

Financing Activities Outflows

  1. ??????
  2. Payment of Bonds, notes etc. (The principal not the interest)
A

Payment of Dividends

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23
Q

Direct Method Statement of Cash Flows

A

List inflows and outflows and get the net amount of the two

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24
Q

Indirect Statement of Cash Flows

A

Starts with net income then make adjustments to eliminate non cash transactions

25
Direct Method Examples
``` Cash collected from customers Interest income Dividends received Interest paid Cash paid to vendors Income Tax paid Wages paid ```
26
Dividends Paid - What Section of Statement of Cash Flows?
Operating Activities
27
Dividends Received - What Section of Statement of Cash Flows?
Financing Activities`
28
Interest Income/interest Paid - What Section of Statement of Cash Flows?
Operating Activities
29
How to Treat change in A/R using Indirect method
Subtract Change in A/R Increase in A/R decreases net income Decrease in A/R = Increase in net income ( double negative makes possitive)
30
Gains (indirect method)
Subtract gains from net income
31
Change in Prepaid Expenses (Indirect Method)
Subtract change in prepaid expenses from net income
32
Change in Inventory ( Indirect Method)
Subtract change in inventory from net income
33
Amortization of Bond Premium (Indirect Method)
Subtract Amortization of Bond Premium from net income
34
Losses (indirect method)
Add losses to net income
35
Depreciation Expense - Indirect method
Add depreciation expense to net income
36
Changes in A/P (Indirect Method)
Add changes in A/P to Net income
37
Amortization of Bond Discount (Indirect Method)
Add amortization of bond discount to net income
38
Note Payable (Indirect Method)
Increase/Decrease in Note Payable not included because it's a financing activity
39
Dividends Paid (Indirect Method)
Not included (it's a financing activity)`
40
Finding Cash Payments (CFS) Start With COGS + Change in inventory ???
Subtract Change in A/P
41
Finding Cash Payments (CFS) Start With COGS ??? - Change in A/P
Add Change in inventory
42
Finding Cash Payments (CFS) ????? + Change in inventory -Change in A/P
Start With COGS
43
How to Determine Cash Collected from A/R (CFS)
Sales Revenue + Change in A/R
44
Amortization of Bond Discount/Premium Effect on Net income (Indirect Method)
Amortization of Bond Discount = an addition to net income | Amortization of Bond Premium = a deduction from net income
45
Purchase of a Treasury Bill Effect on Cash Flows
No effect because it's a cash equivalent.
46
Do Cash Equivalents Effect Cash Flow Statement
No, they have no effect
47
Does Commercial Paper Effect Cash Flow Statement
No effect because it's a cash equivalent.
48
Do Money Markets Effect Cash Flow Statament
No effect because it's a cash equivalent.
49
How is Cash Flow Per Share Disclosed in Statement of Cash Flows?
Not disclosed in the Statement of Cash Flows
50
Which of theses is a required disclosure in Statement of Cash Flows Amount of Taxes Paid? Amount of interest Paid?
Both are required disclosures regardless of method (direct or indirect)`
51
How are Amount of taxes paid & Amount of interest paid Disclosed when using Indirect Method for Statement of Cash Flows
These items are to be disclosed as supplemental disclosures in the statement of cash flows
52
Working Capital
Current Assets-Current Liabilities
53
Cash Paid for Income taxes - ???? - Change in Income Taxes Payable - Change in Deferred income Taxes
Income Tax Expense
54
Cash Paid for Income Taxes - Income Tax Expense - ???? - Change in Deferred income Taxes
Subtract change in income taxes payable
55
Cash Paid for Income Taxes - Income Tax Expense - Change in Income Taxes Payable - ?????
Subtract Change in Deferred income Taxes
56
Earliest to Classify as Discontinued Operations
When it is classified as held for sale
57
Determine Gain on Disposal of Segment
- Gain on the sale minus the losses during the fiscal year. | - This will give you the gain before taxes
58
Period to Record Loss on Disposal of Segment
Record loss when it is estimated This is if the process crosses over two periods, which period is the loss recorded? So, ex: you decide to dispose a division's assets on Oct 1, yr 3 and estimate that there's going to be a $25,000 in Feb yr 4 because that's when you estimate, you sell it.
59
If Segment is Classified as Held for sale during the year (ex: September) how do you calculate Gain/Loss from disposal?
Take operating gain/loss from Jan to September Take gain/loss after September to end of December Net the two and use gain/loss from sale of segment to find gain/loss

CPA Exam - FAR (8 decks)

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