Exam 14: How Well Am I Doing Financial Statement Analysis

Since depreciation expense is added back to net income in the operating section of an indirect method cash flow statement,if depreciation expense increases cash flows will similarly increase.

An increase in a noncash asset will be reported as a source of cash on the cash flow statement.

Cash flow from operating activities was?

Financial statements for Larned Company appear below:

Which of the following statements is correct about cash flows?

If the direct method to prepare the operating section of the cash flow statement is used instead of the indirect method,changes will be required in the financing and investing sections too.

Short-term highly liquid investments such as treasury bills which may be included on the balance sheet within marketable securities will be considered cash in preparation of the cash flow statement.

The operation activities section of the cash flow statement will exclude changes in all noncurrent balance sheet accounts.

Accounts payable increased by $100,000 and accounts receivable decreased by $50,000.What will be the net result in terms of cash flow?

Inventory increased by $100,000 and wages payable increased by $50,000.What will be the net result in terms of cash flow?

In which section of the cash flow statement will dividends payable be reported?

In which section of the cash flow statement will the cash outflow from purchasing land be reported?

The total of wage expense to employees for the year was $600,000.Wages payable to employees at the beginning of the year were $10,000 and at the end of the year $15,000.Wage expense resulted in cash outflows of?

The total of wage expense to employees for the year was $600,000.Wages payable to employees at the beginning of the year were $15,000 and at the end of the year $10,000.Wage expense resulted in cash outflows of?

When an entity uses the direct method in the operating activities section of the cash flow statement it will also have to report operating cash flows under the indirect method.

If an entity both sells capital assets and purchases capital assets during the year,only the net cash inflow or outflow will be reported in the investing section of the cash flow statement.

Cash flow from financing activities was?

Using the indirect method,the operating activities section of the cash flow statement is constructed starting with net income and adjusting it to a cash basis.

Regardless of the basis of accounting used,dividends will always be reported as a use of cash in the financing activities section of the cash flow statement.

Long-term debt on the balance sheet increased by $100,000 and dividends payable increased by $50,000.What will be the net result in cash flow?