Statement of Cash Flows

Question 1

What items are included in operating activities on the Statement of Cash Flows?

Answer 1

Cash received from Customers- Interest & Dividends- Trading Securities

Cash paid to Vendors- Suppliers- Interest- Taxes- Trading Securities

Question 2

What items are included in investing activities on a Statement of Cash Flows?

Answer 2

Cash received: Sale of PP&E- Sale of Investments- Loan Principle

Cash paid: Loans- Acquisitions- AFS or HTM Securities- Taxes- Trading Securities

Question 3

What items are included in Financing Activities in a Statement of Cash Flows?

Answer 3

Cash received: Issuance of Stock- Issuance of Debt

Cash paid: Dividends

Question 4

What is the direct method for a Statement of Cash Flows?

Answer 4

Starts with Income from Continuing Operations

Adjusts for changes in accounts like A/R- A/P- Inventory and non-cash revenues- expenses- gains- losses

If used- the Indirect Method must also be shown

Question 5

What is the Indirect Method for a Statement of Cash Flows?

Answer 5

Starts with Net Income

Adjusts for changes in accounts like A/R- A/P- Inventory and non-cash revenues- expenses- gains- losses

Question 6

Cash Paid to Suppliers

Answer 6

COGS
±Change in Inv
±Change in AP
=Cash Paid to Suppliers

Question 7

Cash Received from Customers

Answer 7

Revenues
±Change in A/R
±Change in Unearned Revenue
=Cash Received from Customers

Question 8

Cash Paid for Other Expenses

Answer 8

Other Operating Expenses
±Change in Prepaid Expense
±Change in Accrued Liab
= Cash Paid for other expenses

Question 9

Cash Paid to Employees

Answer 9

Salaries & Wages Expense
±Change in Wages Payable
=Cash Paid to Employees