Podcast
Questions and Answers
The operating activities section has a relationship with which part of the balance sheet?
The operating activities section has a relationship with which part of the balance sheet?
Current assets and current liabilities
Which of the following is an objective of the statement of cash flows?
Which of the following is an objective of the statement of cash flows?
These are all objectives of the statement of cash flows
All of the following would be included in the operating activities section when preparing the statement of cash flows under the indirect method, except:
All of the following would be included in the operating activities section when preparing the statement of cash flows under the indirect method, except:
How much cash was paid for inventory in 2019 for Our Feathered Friends, Inc.?
How much cash was paid for inventory in 2019 for Our Feathered Friends, Inc.?
Signup and view all the answers
How much cash did Our Taylor, Inc. collect from customers in 2019?
How much cash did Our Taylor, Inc. collect from customers in 2019?
Signup and view all the answers
In the long run, a company must generate positive cash flow from __________ or it will not survive.
In the long run, a company must generate positive cash flow from __________ or it will not survive.
Signup and view all the answers
How much cash did Our Feathered Friends, Inc. collect from customers in 2019?
How much cash did Our Feathered Friends, Inc. collect from customers in 2019?
Signup and view all the answers
In calculating cash from operating activities, increases in current liabilities should be:
In calculating cash from operating activities, increases in current liabilities should be:
Signup and view all the answers
How much cash did Our Taylor, Inc. collect from customers in 2019?
How much cash did Our Taylor, Inc. collect from customers in 2019?
Signup and view all the answers
Compute the net cash provided by operating activities for Hayden, Inc. using the indirect method.
Compute the net cash provided by operating activities for Hayden, Inc. using the indirect method.
Signup and view all the answers
How much cash was paid for inventory in 2019 for Our Taylor, Inc.?
How much cash was paid for inventory in 2019 for Our Taylor, Inc.?
Signup and view all the answers
All of the following would be included in the operating activities section when preparing the statement of cash flows under the indirect method, except:
All of the following would be included in the operating activities section when preparing the statement of cash flows under the indirect method, except:
Signup and view all the answers
Cash flows from investing activities can be discovered by analyzing changes in a company's:
Cash flows from investing activities can be discovered by analyzing changes in a company's:
Signup and view all the answers
The activity classifications in the statement of cash flows include:
The activity classifications in the statement of cash flows include:
Signup and view all the answers
The purchase of treasury stock would be included in which section of the statement of cash flows?
The purchase of treasury stock would be included in which section of the statement of cash flows?
Signup and view all the answers
In calculating cash from operating activities, increases in current assets other than Cash should be:
In calculating cash from operating activities, increases in current assets other than Cash should be:
Signup and view all the answers
Cash-related transactions that affect the income statement are included in which section of the statement of cash flows?
Cash-related transactions that affect the income statement are included in which section of the statement of cash flows?
Signup and view all the answers
Dividend payments would be included in which section of the statement of cash flows?
Dividend payments would be included in which section of the statement of cash flows?
Signup and view all the answers
Which of these two companies appears to have made the larger purchases of property, plant, and equipment during the year?
Which of these two companies appears to have made the larger purchases of property, plant, and equipment during the year?
Signup and view all the answers
Using the provided data, determine the net cash provided/used by operating activities for Asakura Corporation for the current year.
Using the provided data, determine the net cash provided/used by operating activities for Asakura Corporation for the current year.
Signup and view all the answers
Determine the amount of dividends declared and paid by Thompson, Inc. during the year.
Determine the amount of dividends declared and paid by Thompson, Inc. during the year.
Signup and view all the answers
Receiving of cash dividends would be included in which section of the statement of cash flows?
Receiving of cash dividends would be included in which section of the statement of cash flows?
Signup and view all the answers
Compute the net cash provided by operating activities for Morgan, Inc. using the indirect method.
Compute the net cash provided by operating activities for Morgan, Inc. using the indirect method.
Signup and view all the answers
Under which section of the statement of cash flows would Luke Land Development's purchase of Land appear?
Under which section of the statement of cash flows would Luke Land Development's purchase of Land appear?
Signup and view all the answers
Where is the gain resulting from the sale of equipment shown under the indirect method?
Where is the gain resulting from the sale of equipment shown under the indirect method?
Signup and view all the answers
Which financial statement explains why a company's cash balance changed over a period of time?
Which financial statement explains why a company's cash balance changed over a period of time?
Signup and view all the answers
Determine the amount of dividends declared and paid by Dad's Towing during the year.
Determine the amount of dividends declared and paid by Dad's Towing during the year.
Signup and view all the answers
On the statement of cash flows, which item is classified as an investing activity?
On the statement of cash flows, which item is classified as an investing activity?
Signup and view all the answers
On the statement of cash flows, increases and decreases in long-term assets resulting from cash transactions are reported as:
On the statement of cash flows, increases and decreases in long-term assets resulting from cash transactions are reported as:
Signup and view all the answers
The statement of cash flows is designed for all of the following purposes except:
The statement of cash flows is designed for all of the following purposes except:
Signup and view all the answers
Which of the following transactions does not affect cash during a period?
Which of the following transactions does not affect cash during a period?
Signup and view all the answers
Study Notes
Cash Decreasing Transactions
- Transactions that decrease cash include purchasing inventory, paying accounts payable, and investing in research and development (R&D) partners.
Statement of Cash Flows
- The operating activities section correlates with current assets and current liabilities on the balance sheet.
- Objectives of the statement of cash flows encompass understanding cash inflows and outflows.
Operating Activities and Cash Flow
- Under the indirect method, a decrease in prepaid expenses leads to a subtraction, while a decrease in accounts payable is added.
- Increases in current liabilities are added to net income in calculating cash from operating activities.
- Increases in current assets, excluding cash, are subtracted from net income.
Cash Collections from Customers
- Cash paid for inventory can be calculated from financial records; for Feathered Friends, Inc., it was $690,000.
- Cash collected from customers can be determined by analyzing accounts receivable; for Taylor, Inc., it was $2,480,000.
Dividends and Financing Activities
- Cash dividend payments are categorized under financing activities in the statement of cash flows.
- Payments made from retained earnings reflect a company's obligations and impact cash flow.
Non-Cash Transactions
- Purchasing land through a note payable is categorized as a non-cash investing and financing activity in cash flow statements.
Operating Activity Calculations
- Net cash provided by operating activities can be computed using adjustments for depreciation, changes in accounts receivable, inventory, and accounts payable.
- For Hayden, Inc., net cash from operations was $765,000; for Morgan, Inc., it was $823,000.
Impact of Assets and Gains
- The gain from selling equipment is shown as a deduction in the operating activities section.
- Cash-related transactions affecting the income statement are classified under operating activities.
Statement of Cash Flows Purpose
- The statement of cash flows aims to explain changes in a company's cash balance during a specific period.
- It includes three main classifications: operating, investing, and financing activities.
Financial Statements Overview
- Financial statements, including cash flows, do not solely list revenues and expenses but illustrate comprehensive financial changes over time.
- The cash flow statement is essential for assessing a company's liquidity and operational efficiency.
Exempt Transactions
- A write-off of uncollectible accounts does not impact cash flows during a reporting period.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge of key concepts from Chapter 11 of Financial Accounting. This quiz focuses on cash transactions, operating activities, and their relationships with the balance sheet. Perfect for students preparing for exams or needing a review of essential accounting principles.
