Question 1 1 pts There are three basic groups of activities on the Statement of Cash...

Question 1 1 pts There are three basic groups of activities on the Statement of Cash Flows. They are operating activities, investing activities, financing activities. direct activities, indirect activities, immaterial activities. asset activities, liability activities, stockholders' equity activities. income statement activities, balance sheet activities, contingent activities. Flag this Question

Question 2 1 pts The indirect method reports cash flows in the first basic group of activities by starting with total assets. total comprehensive income. net income. net sales. Flag this Question

Question 3 1 pts The ending cash on the Statement of Cash Flows equals the ending cash balance reported on the company income statement. the ending cash balance reported on the company balance sheet. the beginning cash balance reported on the company income statement. the beginning cash balance reported on the company balance sheet. Flag this Question

Question 4 1 pts When using the indirect method, any gain on the sale of a fixed asset (such as land) must be added back to the starting number in the first basic activity group. subtracted from the starting number in the first basic activity group. either added back to or subtracted from the starting number of the first basic activity group, depending on the circumstances surrounding the sale of the fixed asset. gain on the sale of a fixed asset is not considered when using the indirect method of calculating cash flows. Flag this Question

Question 5 1 pts The total cash flows for a company using the indirect method of calculating cash flows will be more than the cash flows calculated by using the direct method. will be less than the cash flows calculated by using the direct method. will be the same as the cash flows calculated by using the direct method. It is not possible to use both methods to calculate cash flows. That is, one method precludes use of the other.

Solutions

Expert Solution

1. The answer is - operating activities, investing activities, financing activities. Operating activities include cash activities related to net income. Investing activities include cash activities related to non-current assets and financing activities include cash activities related to noncurrent liabilities and owners’ equity.

2. The answer is net income. Net income is the starting point and non cash expenses are added back to net income.

3. The answer is the ending cash balance reported on the company balance sheet.

4. The answer is subtracted from the starting number in the first basic activity group. This is because such gains are deducted from net income in the operating activities section.

5. The answer is will be the same as the cash flows calculated by using the direct method. Both direct and indirect methods yield the same result regarding change in cash balance and ending cash balance.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

The three sections of the cash flow statement include operating activities, financing activities, and investing activities....

The three sections of the cash flow statement include operating activities, financing activities, and investing activities. The investing activities show funds that are flowing into the business which are generated by the primary business activity of the company. This is why investing activities are considered to be a report of the “lifeblood of the company”. Select one: True False

1. List the three sections of the Statement of Cash Flows and briefly explain what activities...

1. List the three sections of the Statement of Cash Flows and briefly explain what activities are included in each section. 2. What can creditors, investors, and other users learn from the analysis of the cash flow statements? 3. Explain why depreciation expense, depletion expense, and amortization expense are added to net income in the operating activities section of the statement of cash flows when using the indirect method. 4. Leather Shop earned net income of $57,000 after deducting depreciation...

What are the three main cash sources and uses activities found on a statement of cash...

What are the three main cash sources and uses activities found on a statement of cash flow? A. Revenues, Costs, and Income B. Assets, Liabilities, and Equity C. Net Income, CapEx, and Mergers and Acquisitions D. Operating, Investing, and Financing

Question 35 pts If you did a study comparing three or more independent groups with categorical...

Question 35 pts If you did a study comparing three or more independent groups with categorical or non-normally distributed data, you would use which of the following tests? Oneway ANOVA Chi-Square Kruskal-Wallis test Regression

Question 35 pts If you did a study comparing three or more independent groups with categorical...

1)Distinguish among the three activities reported in the statement of cash flows. 2)Why is it important...

1)Distinguish among the three activities reported in the statement of cash flows. 2)Why is it important to disclose certain non-cash transactions? How should they be disclosed?

Which of the three basic financial statements, Balance Sheet, Income Statement and Statement of Cash Flows...

Which of the three basic financial statements, Balance Sheet, Income Statement and Statement of Cash Flows is most informative in your opinion? Why?

Question 1: Statement of Cash Flows The statement of cash flow reports cash flow amounts including...

Question 1: Statement of Cash Flows The statement of cash flow reports cash flow amounts including 1) operating cash flow, 2) investing cash flows, and 3) financing cash flows. REQUIRED: Describe the corporate strategy of a company that has a positive operating cash flow, an investing cash flow that is negative, and a financing cash flow that is positive. Question 2: Common-Size Balance Sheets Analyzing common-size balance sheet for assets. Please open the attachment “Common-Size Assets”. Three companies are shown...

The statement of cash flows begins with the Financing activities section. Operating activities section. Investing activities...

The statement of cash flows begins with the Financing activities section. Operating activities section. Investing activities section. Last year's ending cash balance. In which section of the statement of cash flows each item would be reported? Paid cash for office supplies (Click to select)Operating ActivitiesInvesting ActivitiesFinancing Activities Paid cash for a computer (Click to select)Operating ActivitiesInvesting ActivitiesFinancing Activities Distributed cash dividend (Click to select)Operating ActivitiesInvesting ActivitiesFinancing Activities Received cash for services (Click to select)Operating ActivitiesInvesting ActivitiesFinancing Activities Purchased treasury stock...

How to and an example: 1. Prepare Operating activities for the statement of cash flow using...

How to and an example: 1. Prepare Operating activities for the statement of cash flow using indirect method

Subjects