Statement of Cash Flows

Question 1

Is the statement of cash flows a required part of the financial statements?

Answer 1

Yes

Question 2

What is the purpose of the statement of cash flows?

Answer 2

To provide information about the sources of cash and cash equivalents

Question 3

What are the 3 types of cash flows?

Answer 3

Operating, investing, and financing

Question 4

What are the 2 methods to present statement of cash flows?

Answer 4

Direct and indirect

Question 5

What method does US GAAP and IFRS encourage?

Answer 5

Direct method

Question 6

Calculation for cash received from customers?

Answer 6

Revenues - Increase in receivables + Decrease in receivables + Increase in unearned revenue - Decrease in unearned revenue

Question 7

What is the mneumonic for the adjustments to the operating activities section of the indirect method?

Answer 7

CLAD(Current assets and liabilities, Losses and gains, Amortization and depreciation, and Deferred items)

Question 8

What noncash amounts are added back to cash flow for operating activities?

Answer 8

Depreciation, amortization, and losses on dispositions of assets

Question 9

What noncash amounts are subtracted from cash flow operating activities?

Answer 9

Gains on dispositions of assets

Question 10

What are other adjustments to operating activities?

Answer 10

Current assets and liabilities