Statement of CF

Question 1

Is a T-bill included in the statement of CF?

Answer 1

No because it is considered to be a cash equivalent item

Question 2

What disclosures are required under the direct method of statement of CF under US GAAP?

Answer 2

1. Major classes of gross cash receipts and gross cash payments
2. Amount of income taxes paid
3. Reconciliation of NI to net CFO

Question 3

Examples of “noncash investing and financing activities”

Answer 3

1. Purchase of FA by issuance of stock
2. Conversion of bonds to equity
3. Acquiring assets through incurrence of capital lease obligation
4. Exchange of one noncash asset for another noncash asset

Question 4

What is the primary purpose of a statement of CF?

Answer 4

To provide relevant info about the cash receipts and cash disbursements of an enterprise during an accounting period

Question 5

How should the amortization of bond discount on LT debt be reported in a statement of CF using the indirect method?

Answer 5

In operating activities as an addition to income

Question 6

Under IFRS, what is dividends paid classified as in the statement of CF?

Answer 6

Financing or operating activities

Question 7

Under IFRS, interest received is classified as what in the statement of CF?

Answer 7

Operating or investing activities

Question 8

Under IFRS, what is interested paid reported as?

Answer 8

Operating or financing