The statement of cash flows provides information about
the relationship between operations and liquidity of a firm
Which of the following statements is true concerning the statement of cash flows
the net change in cash will equal the net change in all non cash accounts
Which method of preparing the statement of cash flows is required by GAAP?
either direct or indirect may be used if appropriate note disclosure is included
The statement of cash flows reports the amount of cash flow from a firm's
operating, investing, and financing activities
Cash flows from operating activities include
selling goods and providing services
On the statement of cash flows, payment of dividends is treated as a/an
financing activity
On the statement of cash flows cash purchase of land is treated as a/an
investing activity
On the statement of cash flows, cash sale of property, plant, and equipment used for the last 5 years in the company's operations is treated as a/an
investing activity
On the statement of cash flows, the issuance of capital stock for cash to be used for future expansion of a production facility us treated as a/an
financing activity
The primary difference between a cash flow statement prepared using the indirect method and one prepared using the direct method is
the operating section is different
In a statement of cash flows, payments to acquire long-term bonds or other debt instruments with maturities greater than one year of other entities should be classified as cash outflows for
investing activities
In the statement of cash flows, proceeds from the issuance of common stock should be classified as cash inflows for
financing activities
The Smith Company had retained earnings at the beginning of the year totaling $100,000. At the end of the year retained earnings totaled $200,000. Depreciation was $50,000 for the year and the company paid dividends of $150,000. What is the amount recorde
a net income of $250,000
Ignoring income tax effects, which of the following is correct concerning depreciation?
Depreciation reduces net income but does not usually require a cash expenditure during the period.
Many countries around the world require
a statement of cash flows
Increased earnings
do not always generate an increase in cash flow
A mature, stable firm might show what type of cash flow pattern from operating, investing, and financing activities?
operating inflow, investing outflow, and financing outflow
If a statement of cash flow showed that a firm had a small cash loss from operating activities, a large cash outflow from investing activities, and a large cash inflow from financing activities, you would expect the firm to be at what stage of development
a profitable, growing firm
International accounting standards adopted by many countries, require
a statement of cash flows
Which of the following concerning the preparation of the statement of cash flows is correct?
both a and b
One can prepare the statement of cash flows
both a and b
Most firms prefer to prepare the statement of cash flows after they have prepared the income statement and the balance sheet. The amounts debited to various accounts on the T-account work sheet
must equal amounts credited to various accounts.
Most firms prefer to prepare the statement of cash flows after they have prepared the income statement and the balance sheet. In the preparation of the T-account work sheet, an error
all of the above
The final step in preparing the statement of cash flows is to use the information provided in the ____ to prepare the formal statement.
master T-Account for Cash