FA Chapter 13

Question 1

Operating in relation to Statement of Cash Flows

Answer 1

cash inflows and outflows that relate directly to revenues and expenses reported on the income statement.

Question 2

Operating: The transaction affects net cash flows if and only if the account

Answer 2

Cash is affected

Question 3

Indirect Method

Answer 3

starts with net income from the income statement and then eliminates non cash items to arrive at net cash inflow (outflow) from operating activities

Question 4

Investing in relation to SOCF

Answer 4

cash inflows and outflows related to the purchase and disposal of long lived productive assets and investments in the securities of other companies.

Question 5

Financing in relation to SOCF

Answer 5

include exchanges of cash with creditors and owners

Question 6

Investing Types for Statement of Cash Flows:

Answer 6

• Sale or disposal of property plant and equipment

* sale or maturity of investments in securities

Question 7

Financing types for Statement of Cash Flows:

Answer 7

• borrowings on notes, mortgages, bonds, etc. from creditors

* issuing stock to owners