Chapter 14 Vocabulary

Question 1

cash flow per share

Answer 1

Normally computed as cash flow from operations per share.

Question 2

account form

Answer 2

The section of the statement of cash flows that reports cash flows from transactions affecting the equity and debt of the business.

Question 3

cash flows from investing activities

Answer 3

The section of the statement of cash flows that reports cash flows from transactions affecting investments in noncurrent assets.

Question 4

cash flows from operating activities

Answer 4

The section of the statement of cash flows that reports the cash transactions affecting the determination of net income.

Question 5

direct method

Answer 5

A method of reporting the cash flows from operating activities as the difference between the operating cash receipts and the operating cash payments.

Question 6

free cash flow

Answer 6

The amount of operating cash flow remaining after replacing current productive capacity and maintaining current dividends.

Question 7

indirect method

Answer 7

A method of reporting the cash flows from operating activities as the net income from operations adjusted for all deferrals of past cash receipts and payments and all accruals of expected future cash receipts and payments.

Question 8

statement of cash flows

Answer 8

A summary of the cash receipts and cash payments for a specific period of time; such as a month or a year.