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Flashcards in Statement of Cash Flows Deck (31):
1

What items are included in operating activities on the Statement of Cash Flows?

Cash received from Customers- Interest & Dividends- Trading Securities

Cash paid to Vendors- Suppliers- Interest- Taxes- Trading Securities

2

What items are included in investing activities on a Statement of Cash Flows?

Cash received: Sale of PP&E- Sale of Investments- Loan Principle

Cash paid: Loans- Acquisitions- AFS or HTM Securities- Taxes- Trading Securities

3

What items are included in Financing Activities in a Statement of Cash Flows?

Cash received: Issuance of Stock- Issuance of Debt

Cash paid: Dividends

4

What is the direct method for a Statement of Cash Flows?

Starts with Income from Continuing Operations

Adjusts for changes in accounts like A/R- A/P- Inventory and non-cash revenues- expenses- gains- losses

If used- the Indirect Method must also be shown

5

What is the Indirect Method for a Statement of Cash Flows?

Starts with Net Income

Adjusts for changes in accounts like A/R- A/P- Inventory and non-cash revenues- expenses- gains- losses

6

Examples of direct method operating activities

Cash collected, Interest and dividends received, cash paid to employees and suppliers, income tax paid, interest paid

7

What is the indirect method

Net income adjusted for changes in current assets other than cash and in current liabilities. Items that resulted from noncash events must be removed from accrual basis income

8

Different in disclosure of noncash transactions for IFRS and GAAP

IFRS - noncash disclosed in notes to financial statements
GAAP - if only a few, report at bottom of statement of cash flows or report in separate schedule in notes to financial statements

9

What items are included in operating activities on the Statement of Cash Flows?

Cash received from Customers- Interest & Dividends- Trading SecuritiesCash paid to Vendors- Suppliers- Interest- Taxes- Trading Securities

10

What items are included in investing activities on a Statement of Cash Flows?

Cash received: Sale of PP&E- Sale of Investments- Loan PrincipleCash paid: Loans- Acquisitions- AFS or HTM Securities- Taxes- Trading Securities

11

What items are included in Financing Activities in a Statement of Cash Flows?

Cash received: Issuance of Stock- Issuance of DebtCash paid: Dividends

12

What is the direct method for a Statement of Cash Flows?

Starts with Income from Continuing OperationsAdjusts for changes in accounts like A/R- A/P- Inventory and non-cash revenues- expenses- gains- losses If used- the Indirect Method must also be shown

13

What is the Indirect Method for a Statement of Cash Flows?

Starts with Net IncomeAdjusts for changes in accounts like A/R- A/P- Inventory and non-cash revenues- expenses- gains- losses

14

Examples of direct method operating activities

Cash collected, Interest and dividends received, cash paid to employees and suppliers, income tax paid, interest paid

15

What is the indirect method

Net income adjusted for changes in current assets other than cash and in current liabilities. Items that resulted from noncash events must be removed from accrual basis income

16

Different in disclosure of noncash transactions for IFRS and GAAP

IFRS - noncash disclosed in notes to financial statements GAAP - if only a few, report at bottom of statement of cash flows or report in separate schedule in notes to financial statements

17

What is the main purpose of statement of cash flows

Provide relevant information about cash receipts and disbursements of enterprise during period

18

How is the purchase of cash equivalents with cash affect cash flows

It is not a cash outflow

19

How is the cash settlement from insurance recorded on statement of cash flows

Investing activities

20

How are cash receipts and payments shown on statement of cash flows

By gross amount, not net

21

How are payments of PPE recorded on statement of cash flows

Cash outflow from investing activities

22

How are noncash activities disclosed

In bottom of statement of cash flows

23

Examples of operating activities net income adjustments

Gain on sale of equipment Amortization of bond discount

24

Examples of financing activities

Dividends paidSale of treasury stock

25

How are excess dividends declared over dividends paid recorded on statement of cash flows

Noncash financing activity

26

Examples of financing activities

Repayment of debtPayment of capital lease - principal only, interest is operating activity

27

What should be included in a supplementary schedule to statement of cash flows

Information about all investing and financing activities of an enterprise that affect cash receipts and payments

28

What should not be included on the statement of cash flows and why

Cash flow per share because it may be misleading

29

How are income taxes paid treated under the direct and indirect method

Direct - cash from operating activities Indirect - required supplemental disclosure

30

Calculate cash paid for cost of goods sold

Cost + (EI - BI) - (EAP - BAP)

31

Calculate cash paid for interest

Interest Exp - (End income tax payable - beg tax payable) - (End def tax payable - Beg def tax payable)