Exam 16: Statement of Cash Flows: Another Look

The term "cash flows"refers to changes in

Which of the following independent transactions would cause net income to be more than cash from operating activities?

The first step in theprocedure for preparing the statement of cash flows using a T-account work sheet is to

The extent to which a firm adjusts net income for changes in noncurrent assets and noncurrent liabilities in deriving cash flow from operations depends on the nature of its operations._____ will usually show additions or subtractions for losses and gains on the disposal of assets.

On a statement of cash flows prepared using the direct method, cash paid for income taxes would be income tax expense minus

King Corporation borrowed $75,000 during Year 2 from its bank under a short-term borrowing arrangement.The statement of cash flows for King Corporation classifies the transaction as a(n)

During Year 7, Seven Corporation wrote down marketable equity securities to their market value.The journal entry made for this write-down is as follows: Unrealized Holding Loss on Marketable Equity Securities Available for Sale ....7.000 Marketable Equity Securities Available for Sale ...........7,000 This entry

Which of the following is/are true?

Queen Corporation borrowed $750,000 during Year 3 from its bank under a long-term borrowing arrangement.The statement of cash flows classifies the transaction as a(n)

Bonds Payable on the balance sheet of Michael LLC includes one series of bonds initially issued at a premium.The entry made in the accounting records for interest expense during the period was as follows: Interest Expense .................4,500 Premium on Bonds Payable ..........500 Cash ...............................5,000 The firm spent $5,000 of cash even though it subtracted only $4,500 of interest expense in computing net income.In preparing the statement of cash flows using the T-account work sheet

The product life-cycle concept from microeconomics and marketing provides useful insights into the relations between cash flows from operating, investing, and financing activities.In the United States, which phase best describes: Biotechnology firms Consumer foods companies Steel manufacturers

In preparing the statement of cash flows for Year 5, internal records indicate that depreciation on manufacturing facilities totaled $500 and on selling and administrative facilities totaled $300 during the year.The firm included these amounts in cost of goods sold and selling and administrative expenses, respectively, in the income statement for Year 5.None of this $800 of depreciation required an operating cash flow during Year 5.The firm reported cash expenditures for these assets as investing activities in the earlier periods when it acquired them.The T-account work sheet entry to explain the change in the Accumulated Depreciation account.

The product life-cycle concept from microeconomics and marketing provides useful insights into the relations among cash flows from operating, investing, and financing activities.During the _____, weakening profitability-from reduced sales or reduced profit margins on existing sales- signals the beginning of the phase, but ever-declining accounts receivable and inventories can produce positive cash flow from operations.In addition, sales of unneeded property, plant, and equipment can result in positive cash flow from investing activities.Firms can use the excess cash flow to repay remaining debt or diversify into other areas of business.

A company's income statement disclosed $45,000 of investment revenue on equity method investments.The company did not purchase or dispose of any such investments during the year, yet the equity method investments account increased $30,000 during the year.What is the complete disclosure of these events in the statement of cash flows prepared under the indirect method?

The product life-cycle concept from microeconomics and marketing provides useful insights into the relations between cash flows from operating, investing, and financing activities.The beginning of the decline phase can produce

The product life-cycle concept from microeconomics and marketing provides useful insights into the relations between cash flows from operating, investing, and financing activities.During the growth phase

The beginning and the ending balances in cash and cash equivalents are entered in the master T-account for preparing the statement of cash flows.Cash equivalents represent _____ in which a firm has temporarily placed excess cash.

The extent to which a firm adjusts net income for changes in noncurrent assets and noncurrent liabilities in deriving cash flow from operations under the indirect method depends on the nature of its operations.Rapidly growing firms usually

The adjustment for changes in operating working capital accounts depends in part on a firm's rate of growth.Some firms use suppliers or other creditors to finance these working capital needs, which are

When using the indirect method to calculate cash flow from operations, add back the subtraction for minority interest in earnings of consolidated, but less than 100%-owned subsidiaries to derive cash flow from operations.