Chapter 12: Statement of Cash Flows



Chapter 12: Statement of Cash Flows

December 6th, 2016

1. Which of the following would not appear in the investing section of the statement of cash flows?

a. Purchase of inventory

b. Sale of investments

c. Purchase of land

d. All of the above would appear in the investing section of the statement of cash flows.

2. Which of the following items would not appear in the financing section of the statement of cash flows?

a. The issuance of the company’s own stock

b. The repayment of debt

c. The payment of dividends

d. All of the above would appear in the financing section of the statement of cash flows

3. Determine under which category each of the following would appear on the statement of cash flows.

O- Operating

I- Investing

F- Financing

NA- Does not appear on statement of cash flows

_____a. Purchase of investments.

_____b. Proceeds from issuance of stock.

_____c. Purchase of plant, property and equipment.

_____d. Depreciation

_____e. Payment of Accounts Payable.

_____f. Purchase of inventory.

_____g. Repayment of a loan.

_____h. Dividends paid.

_____i. Interest paid.

_____j. Receipts from customers.

4. Indicate whether each of the following items would be added (+) or subtracted (-) in the computation of cash flow from operations using the indirect method.

____a. Depreciation

____b. Inventories decrease.

____c. Accounts payable decrease.

____d. Accounts receivable increase.

____e. Accrued liabilities increase.

5. Compute the cash flow of operations using the indirect method.

Net Income $200,000

Depreciation Expense 40,000

Accounts receivable increase 100,000

Inventory decrease 50,000

Accounts payable decrease 110,000

Accrued liabilities increase 60,000

**Questions over final exam material???**

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