Accounting 2102 Final Exam Review Rated 100%
Correct!!
statement of cash flows
reports on a business's cash receipts and cash payments for a specific period
The statement of cash flows helps users
-predict future cash flows
-evaluate management decisions
-predict ability to pay debts and divedends
three basic types of cash flow activities
operating, investing, financing
operating activities
create revenue or expenses in the entity's business
investing activities
increase or decrease long-term assets
financing activities
cash inflows and outflows involved with long-term liabilities and equity
non cash investing and financing activities
issuing stock in exchange for plant assets, retirement of debt by issuing stock, or
purchasing plant assets with long-term notes payable
direct method of cash flows
restates income statement in terms of cash. shows all the cash receipts and cash
payments from operating activities
indirect method of cash flows
starts with net income and adjusts it to net cash provided by operating activities
If current assets other than cash increase, what is the effect on cash
An increase in a current asset other than cash causes a decrease in cash.
decrease in current assets other than cash
causes an increase in cash
What accounts on the balance sheet must be evaluated when completing the
investing activities section of the statement of cash flows?
The long-term asset accounts must be evaluated
What accounts on the balance sheet must be evaluated when completing the
financing activities section of the statement of cash flows?
The long-term liability accounts and the equity accounts must be evaluated
what is free cash flow and how is it calculated
the amount of cash available from operating activities after paying for planned
investments in long-term assets and after paying dividends to shareholders. It is
calculated as: Net cash provided by operating activities - Cash planned for investments
in long-term assets - Cash dividends
three main ways to analyze financial statements
horizontal analysis, vertical analysis, and ratio analysis
annual report (10-K)
report required by the Securities and Exchange Commission that provides information
about a company's financial condition
Correct!!
statement of cash flows
reports on a business's cash receipts and cash payments for a specific period
The statement of cash flows helps users
-predict future cash flows
-evaluate management decisions
-predict ability to pay debts and divedends
three basic types of cash flow activities
operating, investing, financing
operating activities
create revenue or expenses in the entity's business
investing activities
increase or decrease long-term assets
financing activities
cash inflows and outflows involved with long-term liabilities and equity
non cash investing and financing activities
issuing stock in exchange for plant assets, retirement of debt by issuing stock, or
purchasing plant assets with long-term notes payable
direct method of cash flows
restates income statement in terms of cash. shows all the cash receipts and cash
payments from operating activities
indirect method of cash flows
starts with net income and adjusts it to net cash provided by operating activities
If current assets other than cash increase, what is the effect on cash
An increase in a current asset other than cash causes a decrease in cash.
decrease in current assets other than cash
causes an increase in cash
What accounts on the balance sheet must be evaluated when completing the
investing activities section of the statement of cash flows?
The long-term asset accounts must be evaluated
What accounts on the balance sheet must be evaluated when completing the
financing activities section of the statement of cash flows?
The long-term liability accounts and the equity accounts must be evaluated
what is free cash flow and how is it calculated
the amount of cash available from operating activities after paying for planned
investments in long-term assets and after paying dividends to shareholders. It is
calculated as: Net cash provided by operating activities - Cash planned for investments
in long-term assets - Cash dividends
three main ways to analyze financial statements
horizontal analysis, vertical analysis, and ratio analysis
annual report (10-K)
report required by the Securities and Exchange Commission that provides information
about a company's financial condition
