Chapter 5: The Statement of Cash Flows

Question 1

Short-term, highly liquid investments such as Treasury bills, commercial paper, and money market funds

Answer 1

Cash Equivalents

Question 2

Reporting the information contained in the last column of the adjustment worksheet

Answer 2

Direct Method

Question 3

Obtaining resources from owners and providing them a return on their investment, and obtaining resources from creditors, and repaying those borrowings

Answer 3

Financing Activities

Question 4

A method for creating a statement of cash flows a company may use during any given reporting period. Uses accrual accounting information to present the cash flows from the operations section of the cash flow statement

Answer 4

Indirect Method

Question 5

Cash inflows and outflows from acquiring and selling productive assets such as property, plant, and equipment, acquiring and selling investment securities, and lending money and collecting on those loans

Answer 5

Investing Activities

Question 6

Some investing and financing activities affect a company’s financial position but not the company’s cash flows during the period

Answer 6

Non-Cash Investing and Financing Activities

Question 7

All transactions relating to a company’s delivering or producing its goods fr sale and providing its services

Answer 7

Operating Activities

Question 8

A prediction of what actual cash flow statement will look like in future years if operating, investing, and financing plans are implemented

Answer 8

Pro Forma

Question 9

Summarize a company’s cash flows for a period of time

Answer 9

Statement of Cash Flows