MIDTERM

Question 1

tells a specific story about the owner’s stake in the company.

Answer 1

STATEMENT OF CHANGES IN OWNER’S EQUITY

Question 2

Elements of Changes in Owner’s Equity

Answer 2

Statement Heading
Beginning Capital
Additional Investment
Net Income
Drawing
Ending Capital

Question 3

opening balance; ending capital balance of the previous year’s Statement of Changes in Owner’s Equity

Answer 3

Beginning Capital

Question 4

any capital infusion made by the owner for the year.

Answer 4

Additional Investment

Question 5

the amount earned by the business for the year, taken from the Statement of Comprehensive Income.

Answer 5

Net Income

Question 6

represents the owner’s return of investment; occurs when funds are removed from the owner’s account.

Answer 6

Drawing

Question 7

what the owner actually owns; ending capital balance of the current year’s Statement of Changes in Owner’s
Equity.

Answer 7

Ending Capital

Question 8

reports the changes in company equity

Answer 8

Statement of Changes in Owner’s Equity

Question 9

the amount of capital invested or owned by the owner of a company.

Answer 9

Equity

Question 10

What is the formula for Total Ending Capital

Answer 10

Beginning Capital
+ Additional Investment
+ Net Income
Total
- Withdrawal
- Net Loss

Question 11

represents the sources utilization of an organization’s cash and cash equivalent

Answer 11

Statement of Cash Flows

Question 12

useful in predicting future cash outflows and inflows of the organization.

Answer 12

Statement of Cash Flows

Question 13

what are the three major sections of SCF

Answer 13

Operating Activities
Investing Activities
Financing Activities

Question 14

base-line cash activities of the entity related to its normal operating cycle.

Answer 14

Operating Expense

Question 15

related to the primary revenue-producing activity of the entity

Answer 15

Operating Expenses

Question 16

What are the activities under Operating Expense?

Answer 16

+ Cash Receipts From Sales of Goods and Rendering Services
+ Cash Receipts from royalties, fees, commissions, and other revenue
- Cash Payments to suppliers of goods and services
- Cash Payment to employees
- Cash Payment to Income Taxes
- Interest Paid
+ Interest Received
+ Dividends Received

Question 17

+ Cash Receipts From Sales of Goods and Rendering Services

Answer 17

Operating Expense

Question 18

+ Cash Receipts from royalties, fees, commissions and other revenue

Answer 18

Operating Expense

Question 19

• Cash Payments to suppliers of goods and services

Answer 19

Operating Expense

Question 20

• Cash Payment to employees

Answer 20

Operating Expense

Question 21

• Cash Payment to Income Taxes

Answer 21

Operating Expense

Question 22

• Interest Paid

Answer 22

Operating Expense

Question 23

+ Interest Received

Answer 23

Operating Expense

Question 24

+ Dividends Received

Answer 24

Operating expense

Question 25

result from acquisition and disposal of non-current assets.

Answer 25

Investing Activities

Question 25

What are the activities under Investing Activities?

Answer 25

- Cash Payments to acquire property, plant and equipment (PPE) - Cash Payments to acquire intangible assets + Cash receipts from sale of property, plant and equipment + Cash receipts from sale of intangible assets + Cash receipts from sale of their long-term assets

Question 26

- Cash Payments to acquire property, plant and equipment (PPE)

Answer 26

Investing Activities

Question 27

- Cash Payments to acquire intangible assets

Answer 27

Investing Activities

Question 28

+ Cash receipts from sale of property, plant and equipment

Answer 28

Investing Activities

Question 29

+ Cash receipts from sale of intangible assets

Answer 29

Investing Activities

Question 30

+ Cash receipts from sale of their long-term assets

Answer 30

Investing Activities

Question 31

arise from changes in non-current liabilities and owner’s equity of a business organization.

Answer 31

Financing Activities

Question 32

What are the activities in the financing activities?

Answer 32

➕ Cash Investments from owners ➕ Cash proceeds from bank loans ➖Cash distributions to owners ➖ Repayment of Bank Loans

Question 33

+ Cash Investments from owners

Answer 33

Financing Activities

Question 34

+ Cash proceeds from bank loans

Answer 34

Financing Activities

Question 35

- Cash distributions to owners

Answer 35

Financing Activities

Question 36

- Repayment of Bank Loans

Answer 36

Financing Activities

Question 37

Rule Decisions in Determining Classification of Cash Transaction

Answer 37

1. Operating: Profit or Loss 2. Investing: Non-current Assets 3. Financing: Equity and Non-current Liabilities

Question 38

Key Features of Statement of Cash Flow

Answer 38

Statement Heading Cash Flow from operating activities Cash Flow from Investing Activities Cash Flow from Financing Activities Net Increase/Decrease Beginning Cash Balance, Ending cash Balance

Question 39

date format for Changes in Owner's Equity

Answer 39

For the year ended + date

Question 40

date format for Cash flow

Answer 40

For the period ended + date

Question 41

Total cash flows from the three activities.

Answer 41

Net Increase/Decrease

Question 42

cash at the beginning of the current period

Answer 42

Beginning Cash Balance

Question 43

amount of cash at the end of the current year or period

Answer 43

Ending Cash balance

Question 44

What is the formula for Net Cash from Operating

Answer 44

total cash inflow - total cash outflow from the operating expense

Question 45

Formula for Net Cash Flows from Investing Activities

Answer 45

Total Cash Inflows minus - Total Cash Outflows from Investing Activities

Question 46

Formula for Net Increase/Decrease in cash

Answer 46

Net Cash Flows from Operating Activities + Net Cash Flows from IA + Net Cash Flows from FA

Question 47

Formula for the beginning Cash for the year

Answer 47

Ending Cash Balance of the previous year / Opening Cash Balance

Question 48

Formula for Ending Cash for the year

Answer 48

Net Increase/Decrease + Beginning Cash for the year

Question 49

Formula for Net Cash Flows from Financing Activities

Answer 49

Total Cash inflow -Total Cash outflows from Financing Activities