Statements

Question 0

What should be disclosed as supplemental information in the Stmt of Cash Flows?

Answer 0

The conversion of debt to equity

Question 1

A transaction that is unusual, but not infrequent, should be reported separately as a(n):

Answer 1

Component of income from continuing operations, but NOT net of applicable income taxes.

Question 2

Statement of Cash Flows - Direct Method

Answer 2

Directly shows the amount of cash inflows and outflows from operations.

It shows cash received from sales and cash paid in operations.

Question 3

Statement of Cash Flows - Indirect Method

Answer 3

A reconciliation of the accrual based net income to derive cash flows from operations

Question 4

What happens to non-cash items under the indirect method?

Answer 4

Non-cash expenses in the I/S need to be ADDED back to net income to derive cash flows from operations

Non-cash gains on the I/S need to be SUBTRACTED from net income to derive cash flows from operations