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Match Each of the Following Items with the Appropriate Definitions

Question 144

Matching

Match each of the following items with the appropriate definitions.

Premises:

Responses:

Indirect method

Transactions that include making and collecting notes receivable or purchasing and selling plant assets or investments in other than cash equivalents and trading securities

Operating activities

Activities that involve the production or purchase of merchandise and the sale of goods or services to customers, including expenditures related to administering the business

Statement of cash flows

A calculation that reports net income and then adjusts the net income amount by adding and subtracting items that are necessary to yield net cash provided (used) by operating activities

Financing activities

A financial statement that reports the cash inflows and cash outflows for an accounting period and classifies those cash flows as operating, investing or financing activities

Investing activities

A calculation of the net cash provided (used) by operating activities that lists the major items of operating cash receipts and then subtracts the major items of operating cash payments

Direct method

Transactions with a company's owners and creditors that include obtaining cash from issuing debt and repaying the amounts borrowed and obtaining cash from or distributing cash to owners

Premises:

Indirect method

Operating activities

Statement of cash flows

Financing activities

Investing activities

Direct method

Responses:

Transactions that include making and collecting notes receivable or purchasing and selling plant assets or investments in other than cash equivalents and trading securities

Activities that involve the production or purchase of merchandise and the sale of goods or services to customers, including expenditures related to administering the business

A calculation that reports net income and then adjusts the net income amount by adding and subtracting items that are necessary to yield net cash provided (used) by operating activities

A financial statement that reports the cash inflows and cash outflows for an accounting period and classifies those cash flows as operating, investing or financing activities

A calculation of the net cash provided (used) by operating activities that lists the major items of operating cash receipts and then subtracts the major items of operating cash payments

Transactions with a company's owners and creditors that include obtaining cash from issuing debt and repaying the amounts borrowed and obtaining cash from or distributing cash to owners

Correct Answer:

Premises:

Responses:

Indirect method

Operating activities

Statement of cash flows

Financing activities

Investing activities

Direct method