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Flashcards in Mod 17 Wrong Answers Deck (31):
0

Direct method operating activities: cash collected from customers

What item is used on the income statement and what change in accounts on the balance sheet are used to calculate this?

Income statement: sales

BS: A/R gross

1

Direct method operating activities: interest received

What item is used on the income statement and what change in accounts on the balance sheet are used to calculate this?

Income statement: interest revenue

BS: interest receivable

2

Direct method operating activities: dividends received

What item is used on the income statement and what change in accounts on the balance sheet are used to calculate this?

Income statement: dividend revenue

BS: dividend receivable

3

Direct method operating activities: cash paid to suppliers

What item is used on the income statement and what change in accounts on the balance sheet are used to calculate this?

Income statement: COGS

BS: inventory and accounts payable

4

Direct method operating activities: cash paid to employees

What item is used on the income statement and what change in accounts on the balance sheet are used to calculate this?

Income statement: salaries and wage exp.

BS: salaries and wages payable

5

Direct method operating activities: interest paid

What item is used on the income statement and what change in accounts on the balance sheet are used to calculate this?

Income statement: interest exp.

BS: interest payable, premium on B/P, discount on B/P

6

Direct method operating activities: income taxes paid

What item is used on the income statement and what change in accounts on the balance sheet are used to calculate this?

Income statement: income tax expense

BS: income taxes payable, deferred tax liability, deferred tax asset

7

Direct method operating activities: other cash paid

What item is used on the income statement and what change in accounts on the balance sheet are used to calculate this?

Income statement: supplies exp., rent expense

BS: supplies, prepaid rent

8

Under the indirect method in the operating activities section, what 6 items are added back into net income?

1 decrease in current assets
2 increase in current liabilities
3 depreciation
4 amortization of intangible assets
5 bond discount amortization
6 losses

9

Under the indirect method of operating activities section, what 4 items are subtracted from net income?

1 increase in current assets
2 decrease in current liabilities
3 bond premium amortization
4 gains

10

When a current years premium for on bonds payable is amortized for $79,000 in the current year, what happens on the statement of cashflows if the related premium is redeemed for $75,000 in the current year?

Amortization of premium bonds is reduced to $4,000

11

Where does decrease in income taxes payable go on the statement of cashflows?

Operating activities

12

Where does increase in deferred taxes payable go on the statement of cashflows?

Operating activities

13

Where does sale of equipment go on the statement of cashflows?

Investing activities

14

Where does purchase of equipment go on the statement of cashflows?

Investing activities

15

Where does redeem bonds go on the statement of cashflows?

Financing activities

16

Where does issue of common stock go on the statement of cashflows?

Financing activities

17

Where does payment of dividends go on the statement of cashflows?

Financing activities

18

What are the last 3 line items on the statement of cash flows, if there has been a net decrease in cash?

Net decrease in cash
Cash at beginning of year
Cash at end of year

19

What is the subtotal account called at the end of each section on the statement of cashflows?

Net cash flow from operating activities

Net cash flow from investing activities

Net cash flow from financing activities

20

What section on the statement of cashflows would payment of interest on long term note payable go?

Operating activities

21

What is the journal entry to record income tax expense, when a deferred tax liability has increased for the year?

Income tax expense. Xxx
Deferred tax liability. Xxx
Taxes payable. Xxx

22

Interest paid on bonds calculation?

Interest paid on bonds = Face amount x coupon rate

23

Journal entry for redemption of bonds payable with an unamortized premium and a gain on extinguishment?

Bonds payable. Xxx
Unamortized premium on bonds. Xxx
Gain on extinguishment of bonds. Xxx
Cash. Xxx

24

Extinguishment of bonds relates to...

Redeemed bonds

25

Cash from issuance of common stock = ?

Cash from issuance of common stock = common stock + PiC

26

Which accounts need to be looked at for cash dividends being paid?

Dividends payable and retained earnings

27

What is the journal entry to determine a cash inflow from the sale of equipment, when there is a loss on sale of equipment?

Cash. Xxx
Accumulated depreciation. Xxx
Loss on sale of equipment. Xxx
Property plant and equip. Xxx

28

Statement of Cashflows using the indirect method memorize

Statement of cash flows
For the Year ended December 31, 200X

Operating activities:
Net income
Adjustments to Reconcile Net Income to Cashflows from Operating Activities:
Depreciation Expenses
Change in Accounts Payable
Change in Accounts Receivable
Change in Inventory
Change in Interest Payable
Net Cash Provided or Used from operating activities

Investing Activities:
Sale of Equipment
Purchase of Equipment
Sale of Land
Purchase Held to maturity securities
Net Cash Provided or Used from Investing Activities

Financing Activities:
Dividends Paid
Retirement of Mortgage Payable
Redeem Bonds
Issue Common Stock
Borrow on LT note payable
Purchase Treasury Stock
Net Cash Provided of Used from Financing Activities

Change in Cash
Cash, December 31, 20X1
Cash, December 31, 20X2

29

On the statement of cashflows for equipment transactions, companies are required to report...

Gross amounts instead of net amounts

30

What are the 5 major categories in the operating activities section using the direct method?

And the name for the subtotal column?

Cash collected from customers
Cash paid to employees
Cash paid to suppliers
Cash paid for interest
Cash paid for income taxes

Cash provided from operating activities