Exam 9: Preparing and Analyzing the Statement of Cash Flows

Cash paid to vendors is characterized as an ________ activity.

Cash proceeds from a new stock issue is a(n)________ activity on the statement of cash flows.

Wilson Wong is reviewing his financial statements for May.His dry cleaning business had net income of $13,000 for May,but his business checking account shows a decrease of $4,500.Explain to Wilson why the net income for the business and the ending balance in cash are not the same amounts.

Clean Dirt,Inc.had $10,000 of accounts receivable at December 31,2010.During 2011,Clean Dirt's sales were $100,000.At December 31,2011,Clean Dirt's statement of cash flows showed cash collected from customers of $102,000.How much was Clean Dirt's accounts receivable balance on its December 31,2011 balance sheet?

The following information is from Sharp,Inc.'s December 31,2011 annual report: Cash paid for salaries on Sharp,Inc.'s statement of cash flows equals ________.

Which of the following statements is true?

The following information is from Sharp,Inc.'s December 31,2011 annual report: Cash collected from customers on Sharp,Inc.'s statement of cash flows equals ________.

Match each of the following line items with the type of activity. -issuance of bonds

Use the following information from Artizan,Inc.'s computerized accounting information system to prepare the financing activities section of the statement of cash flows for May.

Positive cash flow from investing activities on the statement of cash flows means that a company has ________.

Delgado,Inc.wants to apply for a bank loan.Delgado gave an income statement and balance sheet to the bank.However,the bank wants a statement of cash flows as well.Explain why the bank wants a statement of cash flows and how the statement is organized.

Cash from operating activities includes ________.

Team Shirts,Inc.recognized $8,144 of supplies expense for the year.At the beginning of the year,the balance in Supplies was $1,625.At the end of the year,the balance was $2,035.All supplies have been paid for in cash.How is the accounting information for these items reported on the statement of cash flows using the indirect method?

Negative cash flow from investing activities on the statement of cash flows most likely indicates a company is ________.

Team Shirts,Inc.collected $16,000 from accounts receivable,paid $10,000 of its accounts payable and paid $1,000 in interest.The amount of net cash from (or used)for OPERATING activities is ________.

Investors use the statement of cash flows in order to determine whether a company has positive cash flows from operating activities.

A company that has a positive cash flow from operating activities and a negative cash flow from investing activities may be in poor financial health and having to sell its long-term assets to pays its current liabilities.

Which of the following statements is true?

Match the income statement and related balance sheet line items that are used to determine the amount of cash on the statement of cash flows: A Sales B. Cost of goods sold C. Salaries expense D. Supplies expense E. Insurance expense F. Interest expense G. Cash H. Accounts receivable I. Prepaid insurance J. Interest payable K. Supplies L. Salary payable M. Inventory N. Accounts payable Statement of Cash Flows Line Items: Income Statement Balance Sheet 1. Cash collected from customers 2. Cash paid to vendors 3. Cash paid for supplies 4. Cash paid for interest 5. Cash paid for insurance 6. Cash paid for salaries

Cash from investing activities includes all cash receipts and all cash disbursements for long-term business assets.