CASH FLOW STATEMENT

Question 1

Acquiring & Disposing of Investment. Cash effects of transactions involving making and collecting loans.

Acquisition or disposal of Available-for-Sale (AFS) debt securities or Held-to-Maturity (HTM) investments (not trading). Acquisition or disposal of PP&E and intangibles.

Answer 1

CFI

Question 2

The cash effects of transactions that enter into the determination of net income are included in operating activities, not financing activities.

Answer 2

CFO

Question 3

The cash effects of transactions obtaining resources from owners and providing them with a return on their investment.

Answer 3

CFF

Question 4

What is the INCOME STATEMENT Equation?

Answer 4

Sale
(COGS)
GP
(Oper Exp)
Oper Profit
(Taxes)
(Interest)
Net Income

Question 5

What is the DIRECT METHOD equation for CFO from Operating?

Answer 5

Cash Received from Customers:
+/- AR
+/- Unearned Revenue
Less: Cash Paid to Suppliers:
COGS
+/- Inventory
+/- AP
Less: Other Expenses
Interest Paid
Dividends Paid
TOTAL CFO FROM OPERATING ACT:

Question 6

What is the INDIRECT METHOD equation for CFO from Operating?

Answer 6

NET INCOME
ADD: NC Expenses
Depreciation
Discount Amortization
Impairment
LESS: NC Income
Prem Amortization
Equity Earnings of Investee
NON-OPERATING ITEMS:
Add: Loss on Sale of NCA
Less: Gain on Sale of NCA
WORKING CAPITAL ADJUSTMENTS:
Add: Increase in CL
Add: Decrease in AR
Less: Decrease in CL
Less: Increase in AR

Question 7

What is the equation for calculating CFF?

Answer 7

Add: Issue of Common Stock/Preference Stock
Add: Issue of Debt
Less: Repayment of Debt
Less: Redemption/Repurchase of Stock
Less: Dividends Paid
TOTAL Cash Inflow (Outflow) from Financing Activities

Question 8

What is the equation for calculating CFI?

Answer 8

Add: Proceeds from Sale of Non-Current Assets
Less: Cash paid Purchase of Non-Current Assets
TOTAL Cash Inflow (Outflow) from Investing Activities

Question 9

What is the equation for calculating Proceeds from Sale of Assets from CFI?

Answer 9

Original Cost of the Asset Sold
Less: Accumulated Depreciation (BS)
=Net Book Value (BS)
Add: Gain on Sale of NCA (IS)
Less: Loss on Sale of NCA (IS)
TOTAL Proceeds from Sale of NCA

Question 10

What is the equation for calculating Cash Paid to Suppliers?

Answer 10

Calculate Purchases:
Opening Inventory
+ Purchases (Balancing Figure)
- Cost of Goods Sold
=Ending Inventory

Calculate Cash Payment:
Opening Accounts Payable
+ Purchases
- Cash Payment (Balancing Figure)
= Ending Accounts Payable

Question 11

Non-cash activities are not included in the statement of cash flow but are disclosed in the supplementary disclosures to the statement of cash flow.

Answer 11

True