Chap 24

Question 1

Cash Equivalents

Answer 1

assets the are easily convertible into known amounts of cash

Question 2

Direct Method

Answer 2

a means of reporting sources and uses of cash under which all revenue and expenses reported on the income statement appear in the operating section of the statement of cash flows and show the cash received or paid out for each type of transaction

Question 3

Financing Activities

Answer 3

transactions with those who provide cash to the business to carry on its activities

Question 4

Indirect Method

Answer 4

a means of reporting cash generated from operating activities by treating net income as the primary source of cash in the operating section of the statement of cash flows and adjusting that amount for changes in current assets and liabilities associated with net income, noncash transaction and other items

Question 5

Investing Activities

Answer 5

transactions that involve the acquisition or disposal of long-term assets

Question 6

Operating Activities

Answer 6

routine business transactions – selling goods or services and incurring expenses

Question 7

Operating Assets and Liabilities

Answer 7

current assets and liabilties

Question 8

Schedule of Operating Expenses

Answer 8

a schedule that supplements the income statement, showing the selling and general and administrative expenses in greater detail

Question 9

Statement of Cash Flows

Answer 9

a financial statement that proves information about the cash receipts and cash payments of a business