Chapter 24 - Statement of Cash Flows

Question 1

SOURCES AND USES OF CASH

statement of cash flows

Answer 1

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

Question 2

SOURCES AND USES OF CASH

cash equivalents

Answer 2

• assets that are easily convertible into known amounts of cash

Question 3

SOURCES AND USES OF CASH

operating activities

Answer 3

• routine business transactions - selling goods or services and incurring expenses

Question 4

SOURCES AND USES OF CASH

investing activities

Answer 4

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

Question 5

SOURCES AND USES OF CASH

financing activities

Answer 5

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

Question 6

CASH FLOWS FROM OPERATING EXPENSES

schedule of operating expenses

Answer 6

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

Question 7

CASH FLOWS FROM OPERATING EXPENSES

operating assets and liabilities

Answer 7

• current assets and current liabilities

Question 8

CASH FLOW FROM INVESTING AND FINANCING ACTIVITIES

indirect method

Answer 8

• 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 current liabilities associated with net income, noncash transactions, and other items

Question 9

CASH FLOW FROM INVESTING AND FINANCING ACTIVITIES

direct method

Answer 9

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