FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 12: Statement of Cash Flows

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Essay

Review LaterAdd Note

Review Later

For each letter in the T-accounts below,calculate the missing amount and explain (in words)what each item represents.

Correct Answer

verified

None...

View Answer

Show Answer

Question 32

Multiple Choice

Review LaterAdd Note

Review Later

When the indirect method is used,if prepaid expenses decreases during the accounting period,the change in prepaid expenses is:

A) added to the change in the cash account.
B) subtracted from net income.
C) added to net income.
D) subtracted from the change in the cash account.

E) A) and B)
F) A) and C)

Correct Answer

verified

Show Answer

Question 33

Multiple Choice

Review LaterAdd Note

An outdoor water park in Quebec with a calendar year-end is likely to have:

Which of the following is not needed to prepare a statement of cash flows?

Which of the following would be reported as a cash outflow from investing activities?

When the direct method is used to determine the net cash flow from operating activities,if accounts receivable increase over the accounting period,the change in accounts receivable is:

When the direct method is used to determine the net cash flow from operating activities,the following adjustments must be made to interest expense to determine total interest payments:

Indirect method is more detailed as it shows the operating cash receipts and cash payments and is thus more time-consuming and costly.

All other things equal,when net income and operating cash flows are similar,there is a likelihood that revenues are realized in cash and that expenses are associated with cash outflows.

A statement of cash flows is

The financial information below presents operating revenue and expenses for 2018 as well as the starting and ending balances for relevant asset and liability accounts that changed during the year: $\begin{array}{|r|r|r|r|}\hline \text { Sales revenue } & \$ 909,272 & \text { Depreciation expense } & \$ 3,206 \\\hline \text { Cost of goods sold } & 445,563 & \begin{array}{r}\text { Selling, general and administrative } \\\text { expenses }\end{array} & 91,316 \\\hline \text { Interest expense } & 12,407 & \text { Income tax expense } & 143,126 \\\hline \text { Accounts receivable 12/31/17 } & 65,305 & \text { Accounts receivable 12/31/18 } & 67,810 \\\hline \text { Accounts payable } 12 / 31 / 17 & 16,540 & \text { Accounts payable 12/31/19 } & 17,261 \\\hline \text { Prepaid expenses 12/31/17 } & 4,107 & \text { Prepaid expenses 12/31/1 } & 3,875 \\\hline \text { Inventory 12/31/17 } & 7,857 & \text { Inventory 12/31/1 } & 6,491 \\\hline\end{array}$ Prepare the Operating section of the Cash Flow Statement using the indirect approach.

A change in a company's cash account is equal to the:

Identify whether each of the following list of items is an operating activity cash flow (O),an investing activity cash flow (I),a financing activity cash flow (F),or none of these (None). _____ Sale of equipment. _____ Cash collected from customers. _____ Payments to suppliers. _____ Stock repurchases. _____ Repayment of bond principal. _____ Payment of income tax. _____ Purchases of bonds from other companies. _____ Purchases of equipment financed with a note. _____ Interest and dividends received. _____ Payment of dividends.

Although Generally Accepted Accounting Principles prefer the direct method of accounting for cash flows from operations,most Canadian companies use the indirect method.

Complete the following table by classifying dividends and interest as Financing (F),Investing (I)and/or Operating (O)under ASPE and IFRS.

Which of the following would be included in calculating net cash flows from financing activities?

ASPE and IFRS currently allow companies to use only the indirect method.

Cash flows from financing activities:

When the direct method is used to determine the net cash flow from operating activities,other operating expenses are converted into cash outflows for payments to suppliers of services by:

Recording accrued expenses decreases the balance in Accrued Liabilities and cash payments for the expenses decreases Accrued Liabilities.