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CPA FAR > Cash Flow Plus > Flashcards

Cash Flow Plus Flashcards

1
Q

Calc bonus as a % of income before bonus but after tax

A 
Multi part algebra
Bonus = B
Tax = T
Tax % = x
Bonus % = m
If:
B = m(Income-T)
T = x(Income-B)
then:
B = m(Income - [x(Income-B)]
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2
Q

Statement Changes in Equity

GAAP vs IFRS

A

IFRS

  • Must be separate statement (US allows footnotes or sup. statement as well)
  • Must separate non-owner changes
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3
Q

Statement of Cash Flow

A 
Operating
Investing
Financing
Foreign transaction adjustments
Change in Cash
 beg cash
 end cash
Non-cash Inv. and Fin. activities
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4
Q

Statement of Cash Flow

Direct & Indirect

A

Direct Indirect
Op CF Reconciliation
Inv CF Inv CF
Fin CF Fin CF

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5
Q

Dividend Inc and Interest Income on bonds

A

Operating Activities

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6
Q

OIF - for Cash Flows

GAAP vs IFRS

A

Activity IFRS GAAP
Int Paid Op or Fin Op only
Int Rec’d Op or Inv Op only
Taxes paid Op or Fin or Op only
Inv if applies to inv
Div Rec’d Op or Inv Op only
Div Paid Op or Fin Fin only
Cash & eq bank overdraft no

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7
Q

Op/Inv/Fin Cash Flow?

Payment to suppliers

A

Operating

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8
Q

Op/Inv/Fin Cash Flow?

Interest payment

A

Operating

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9
Q

Op/Inv/Fin Cash Flow?

Payment to retire bonds

A

Financing

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10
Q

Op/Inv/Fin Cash Flow?

Downpayment to purchase equipment

A

Investing

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11
Q

Op/Inv/Fin Cash Flow?

Payment on purchased equipment loan

A

Financing

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12
Q

Op/Inv/Fin Cash Flow?

Obtain loan on property held as investment

A

Financing

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13
Q

Op/Inv/Fin Cash Flow?

Purchase of treasury stock

A

Financing

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14
Q

Op/Inv/Fin Cash Flow?

Depreciation Expense

A

Not a cash flow

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15
Q

Op/Inv/Fin Cash Flow?

Purchase of trading securities

A

Operating

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16
Q

Op/Inv/Fin Cash Flow?

Mortgage payment

A

Operating & Financing (principal & interest)

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17
Q

Op/Inv/Fin Cash Flow?

Dividends on investments

A

Operating

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18
Q

Op/Inv/Fin Cash Flow?

Loss on disposal of equipment

A

Not a cash flow

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19
Q

Op/Inv/Fin Cash Flow?

Proceeds from sale of securities available for sale

A

Investing

20
Q

Op/Inv/Fin Cash Flow?

Annual lease payment on capital lease

A

Operating & Financing (principal & interest)

21
Q

Op/Inv/Fin Cash Flow?

Payment to fund company pension plan

A

Operating

22
Q

Op/Inv/Fin Cash Flow?

Increase in A/R

A

Not a cash flow

23
Q

Which SCF format? Direct/NonDirect/Both?’

Proceeds from sale of land held as investment

A

Both

24
Q

Which SCF format? Direct/NonDirect/Both?

Change in wages payable

A

Both - this is a reconciliation account

25
Q

Which SCF format? Direct/NonDirect/Both?

Income Taxes paid

A

Direct

26
Q

Which SCF format? Direct/NonDirect/Both?

Insurance premium payments

A

Direct

27
Q

Which SCF format? Direct/NonDirect/Both?

Real estate taxes paid

A

Direct

28
Q

Which SCF format? Direct/NonDirect/Both?

Change in income tax

A

Both - this is a reconciliation account

29
Q

Which SCF format? Direct/NonDirect/Both?

Patent amortization

A

Both - this is a reconciliation account

30
Q

Which SCF format? Direct/NonDirect/Both?

COGS

A

Neither

31
Q

Which SCF format? Direct/NonDirect/Both?

Proceeds from sale of LT bond investment

A

Both

32
Q

Which SCF format? Direct/NonDirect/Both?

Collections on loans to customers (principal)

A

Both - shown as an investment activity

33
Q

Which SCF format? Direct/NonDirect/Both?

Collections on loans to customers (interest)

A

Direct - shown as an operating activity

34
Q

Which SCF format? Direct/NonDirect/Both?

Dividends paid

A

Both - Financing

35
Q

Which SCF format? Direct/NonDirect/Both?

Amortization of Bond Discount

A

Both

36
Q

Which SCF format? Direct/NonDirect/Both?

Proceeds from sale of land (noninvestment)

A

Both

37
Q

Which SCF format? Direct/NonDirect/Both?

Purchase of cash equivalent securities

A

Neither - not a cash flow

38
Q

Loss on sale of assets

A

Reduces NI but not CF - must be added back to CF

39
Q

Indirect Method of SCF

Decrease in A/R

A

Added to accrual NI

Increase in A/R is subtracted

40
Q

Indirect Method of SCF

Decrease in Inventory

A

Added to accrual NI

Increase would be subtracted

41
Q

Indirect Method of SCF

Decrease in Unearned Revenue

A

Subtracted from accrual NI

Increase would be added

42
Q

Indirect Method of SCF

Decrease in A/P

A

Subtracted from accrual NI

Increase would be added

43
Q

SCF add or subtract equation

A

Chg in Cash = Chg in Liabilites + Chg in OE - Chg in all other assets

Works for NI & Sales - Opposite signs for Expenses

44
Q

Interest & Taxes paid in SCF using indirect method are reported where?

A

Notes or supplementary schedulre

45
Q

Op/Inv/Fin Cash Flow?

Dividends paid

A

Financing

46
Q

Op/Inv/Fin Cash Flow?

Dividends paid

A

Financing

CPA FAR (20 decks)

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