Chapter 16

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Anonymous
ID:
34899
Filename:
Chapter 16
Updated:
2010-09-15 10:58:14
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AP3
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AP3
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  1. cash flow per share
    Normally computed as cash flow from operations per share.
  2. cash flows from financing activities
    The section of the statement of cash flows that reports cash flows from transactions affecting the equity and debt of the business.
  3. cash flows from investing activities
    The section of the statement of cash flows that reports cash flows from transactions affecting investments in noncurrent assets.
  4. cash flows from operating activities
    The section of the statement of cash flows that reports the cash transactions affecting the determination of net income.
  5. direct method
    A method of reporting the cash flows from operating activities as the difference between the operating cash receipts and the operating cash payments.
  6. free cash flow
    The amount of operating cash flow remaining after replacing current productive capacity and maintaining current dividends.
  7. indirect method
    A method of reporting the cash flows from operating activities as the net income from operations adjusted for all deferrals of past cash receipts and payments and all accruals of expected future cash receipts and payments.
  8. statement of cash flows
    A summary of the cash receipts and cash payments for a specific period of time, such as a month or a year.
  9. The statement of cash flows is not one of the basic financial statements
    False
  10. Cash flows from investing activities, as part of the statement of cash flows, include payments for the purchase of treasury stock.
    False
  11. Cash flows from investing activities, as part of the statement of cash flows, include receipts from the issuance of bonds payable.
    False
  12. There are two alternatives to reporting cash flows from operating activities in the statement of cash flows:
    1) The direct method
    2) The indirect method
    True
  13. The main disadvantage of the direct method of reporting cash flows from operating activities is that the necessary data are often costly to acccumulate.
    True
  14. The acquisition of land in exchange for common stock is an example of noncash investing and financing activity.
    True
  15. A cash flow per share amount should be reported on the statement of cash flows.
    False
  16. Using the indirect method, if land costing $85,000 was sold for $145,000, the amount reported in the financing activities section of the statement of cash flows would be $85,000.
    False
  17. Under the indirect method, expenses that do not affect cash are added to net income in the operating activities section of the statement of cash flows.
    True
  18. The manner of reporting cash flows from investing and financing activities will be different under the direct method as compared to the indirect method.
    False
  19. Identify the section of the statement of cash flows in which the following would appear:
    Issued Common Stock
    Financing
  20. Identify the section of the statement of cash flows in which the following would appear:
    Redeemed Bonds
    Financing
  21. Identify the section of the statement of cash flows in which the following would appear:
    Issued preferred stock
    Financing
  22. Identify the section of the statement of cash flows in which the following would appear:
    Purchased patents
    Investing
  23. Identify the section of the statement of cash flows in which the following would appear:
    Net Income
    Operating
  24. Identify the section of the statement of cash flows in which the following would appear:
    Paid cash dividends
    Financing
  25. Identify the section of the statement of cash flows in which the following would appear:
    Purchased treasury stock
    Financing
  26. Identify the section of the statement of cash flows in which the following would appear:
    Sold long-term investment
    Investing
  27. Identify the section of the statement of cash flows in which the following would appear:
    Sold equipment
    Investing
  28. Identify the section of the statement of cash flows in which the following would appear:
    Purchased Buildings
    Investing
  29. Identify the section of the statement of cash flows in which the following would appear:
    Issued bonds
    Financing

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