Chapter 11 Key Words

Question 1

A financial statement that measures activities involving cash receipts and cash payments over a period of time.

Answer 1

statement of cash flows

Question 2

Transactions involving revenue and expense activities.

Answer 2

operating activities

Question 3

Transactions involving the purchase and sale of long-term assets and current investments.

Answer 3

investing activities

Question 4

Transactions with lenders, such as borrowing money and repaying debt, and with stockholders, such as issuing stock, paying dividends, and purchasing treasury stock.

Answer 4

financing activities

Question 5

Significant investing and financing activities that do not affect cash.

Answer 5

noncash activities

Question 6

Begins with net income and then lists adjustments to net income in order to arrive at operating cash flows.

Answer 6

indirect method

Question 7

Adjusts the items in the income statement to directly show the cash inflows and outflows from operations, such as cash received from customers and cash paid for inventory, salaries, rent, interest, and taxes.

Answer 7

direct method

Question 8

Net cash flows from operating activities divided by average total assets; measures the operating cash flow generated per dollar of assets.

Answer 8

cash return on assets

Question 9

Net cash flows from operating activities divided by sales revenue; measures the operating cash flow generated per dollar of sales.

Answer 9

cash flow to sales