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Accounting > Chapter 14 Cash Flows > Flashcards

Chapter 14 Cash Flows Flashcards

1
Q

The section of the statement of cash flows that reports cash flows from transactions affecting the equity and debt of the business

A

cash flows from financing activities

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2
Q

the section of the statement of cash flows that reports cash flows from transactions affecting investments in non-current assets

A

cash flows from investing activities

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3
Q

a summary of the major cash receipts and cash payments for a period

A

statement of cash flows

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4
Q

a method of reporting the cash flows from operating activities as the difference between the operating cash receipts and the operating cash payments

A

direct method

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5
Q

the section of the statement of cash flows that reports the cash transactions affecting the determination of net income

A

cash flows from operating activites

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6
Q

a method of reporting the cash flows from operating activities as the net income from operations adjusted for all deferrals of past cash receipts and payments and all accruals of expected future cash receipts and payments

A

indirect method

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7
Q

the amount of operating cash flow remaining after replacing current productive capacity

A

free cash flow

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8
Q

the financial statement that reports a firm’s major cash inflows and outflows for a period is the ____ ____ ____ ___

A

statements of cash flows

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9
Q

the two alternative methods of reporting operating activities in the statement of cash flows are the ___ and ____ method

A

direct and indirect

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10
Q

cash flows resulting from the redemption of debt securities are classifies in the statement of cash flows as related to _____ activities

A

financing

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11
Q

the _____ method of analyzing operating cash flows beings with net income and adjusts it for revenues and expenses that do not involve the receipt or payment of cash

A

indirect

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12
Q

the statement of cash flows groups cash flow activities as financing, investing, or _____

A

operating

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13
Q

when the _____ method of reporting cash flows is used, a supplemental schedule reconciling net income and net cash flow from operating activities must also be prepared

A

direct

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14
Q

retirement of long-term debt would appear under ___ activities

A

financing

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15
Q

sale of common stock would appear under ____ activities

A

financing

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16
Q

net income would appear under _____ activites

A

operating

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17
Q

payment of cash dividends would appear under ____ activities

A

financing

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18
Q

purchase of equipment would appear under ____ activites

A

investing

19
Q

_____ investing and financing activities that will affect future cash flows are reported in a separate schedule to the statement of cash flows

A

non cash

20
Q

which of the following is not one of the major sections of the statement of cash flows

  • cash flows from financing activities
  • cash flows from selling activities
  • cash flows from operating activities
  • cash flows from investing activities
A

-cash flows from selling activities

21
Q

non-cash investing and financing activities which may have a significant effect on future cash flows are reported

  • in the statement of cash flows
  • in a separate schedule to accompany the statement of cash flows
  • in the retained earnings statement
  • in a footnote accompanying the balance sheet
A

-in a separate schedule to accompany the statement of cash flows

22
Q

under the indirect method, which of the following items must be deducted from reported net income to determine net cash flow from operating activities ?

  • depreciation of fixed assets
  • decreases in current assets
  • decreases in current liabilities
  • loss on sale of equipment
A

-decreases in current liabilities

23
Q

during the past year, lock inc declared $40,000 in cash dividends. beg and end year balances were 12000 and 10000, what amount of cash paid for dividends will appear in the cash flows from financing activities section of the socf

A

42,000

24
Q

under the direct method which of the following items must be added to operating expenses reported on the income statement to determine cash payments for operating expenses?

  • increase in accrued expenses
  • decrease in prepaid expenses
  • increase in income taxes payable
  • increase in prepaid expenses
A

-increase in prepaid expenses

25
Q

t or f:

the statement of cash flows is required as a part of the basic set of financial statements

A

true

26
Q

t or f:

cash outflows from the payment of cash dividends is a type of financing activity

A

true

27
Q

t or f:

cash receipts from the sale of fixed assets would be classifies as a cash flow from investing activites

A

true

28
Q

under the indirect method, increases in current liabilities are deducted from net income reported on the income statement in determining cash flows from operating activities

A

false

29
Q

non-cash investing and financing activities that may have a significant effect on future cash flows should be included in a separate schedule to the statement of cash flows

A

true

30
Q

the correct amount to include in cash flows from financing activities is cash dividends paid, not cash dividends declared

A

true

31
Q

depreciation expense on equipment would appear under ___ activities

A

operating

32
Q

sale of long-term investments would appear under ___ activities

A

investing

33
Q

issuance of bonds would appear under ____ activities

A

financing

34
Q

sale of patents would appear under ____ activities

A

investing

35
Q

young company issued 500,000 shares of common stock, inventory increased by $20,000 and a new asset was purchased for $1,000,000.
common stock issued, net cash flows ____

A

increases

36
Q

young company issued 500,000 shares of common stock, inventory increased by $20,000 and a new asset was purchased for $1,000,000.
inventory increased. net cash flows ____

A

decreases

37
Q

young company issued 500,000 shares of common stock, inventory increased by $20,000 and a new asset was purchased for $1,000,000.
new asset purchased. net cash flows ____

A

decreases

38
Q

cash dividends of $35000 were declared. 8000 and 8750 at beginning and end of year. the amount of cash flows for payment of dividends during the year is ____

A

$34250

39
Q

the net income from operations was 75,000 and the only revenue or expense item not affecting cash was depreciation expense of 27,000/ the amount of net cash flows from operating activities that would appear on the statement of cash flows is ____

A

$102,000

75000+27000

40
Q

a corp purchased and retired 3,000 shares of its $50 par common stock, originally issued at par for $65. cash flows amounted to _____

A

$195,000

3000 times 65

41
Q

if a fized asset having a book value of $54,000 is sold for cash at a gain of $6,000, the total amount reported as cash flow is

A

$60,000

54000+6000

42
Q

the $47000 net income for the year included a loss of $2500 on the sale of land. exclusive of the effect of other adjustments, the amount of net cash flows from operating activities is

A

49,500

47000+2500

43
Q

a corp issued $1,000,000 of bonds payable at 104. cash flow from this transaction was

A

1,400,000

1000000x104

44
Q

if 15,000 shared of $20 par common stock were issued at 22, the amount to be reported in the cash flows from financing activities section of the statement of cash flows would be 330,000

A

330,000

15,000x22

Accounting (9 decks)

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