BUS 251 FINAL EXAM QUESTIONS
AND 100% CORRECT ANSWERS
GRADED A+.
What are the most important things included in statement of cash flows? - Answer 1.
Operating Activities (start with net income) -> then net cash
2. Investing Activities -> then net cash
3. Financing Activities -> then net cash
4. Net Change in Cash (Increase or Decrease)
5. Ending, Opening, Net Change in Cash
6. Supplemental Cash Flow Information (Ex. Cash paid for interest)
How to calculate cash flow from operating? - Answer ADD
1. Net income +
2. Depreciation/ depletion/ amortization expense +
3. Loss on sale of long-term assets (decrease in inventory) +
4. Decreases in current assets other than cash (A/R) +
5. Increases in current liabilities (payables) +
LESS
1. Gain on sale of long-term assets -
2. Increases in current assets other than cash -
3. Decreases in current liabilities =
TOTAL CASH FLOW FROM OPERATING
How to calculate cash flow from investing? - Answer ADD
1. Sales of non-current assets +
2. Sales of non-current investments +
3. Collections of notes receivable +
LESS
1. Purchases of non-current assets -
2. Purchases of non-current investments -
, 1. Issuance of shares +
2. Borrowing funds +
LESS
1. Repurchase of shares -
2. Payments of notes and bonds payable -
3. Payments of dividends =
TOTAL CASH FLOW FROM FINANCING
How to find dividends declared? - Answer Beg R/E + Net Income - Dividends Declared = Ending
R/E
How to find dividends payable? - Answer (Beg Balance of dividends payable + Dividends
declared) - Dividends paid during the year = Ending Balance of dividends payable
How to find cash collected from customers? - Answer A/R end of last year + Sales - Cash
collected from customers = A/R end of this year
How to find purchases? - Answer Inventory end of last year + Purchases - COGS = Inventory
end of this year
How to find cash paid to suppliers? - Answer A/P end of last year + Purchases - Amount paid to
suppliers = A/P end of this year
How to find change in long term debt? - Answer Net borrowings = Issuances of debt -
repayment of debt
Beg Long-term debt + New debt - Payments = Ending Long-term debt
How to find net change in S/E? - Answer Net income - Dividends Paid + Common Shares Issued
- Common Shares Repurchased = Changes in S/E
What are Operating, Investing , and Financing Activities? - Answer Operating
- Day-to-day business activities (Ex. Collection of accounts receivables, increases/decreases in
current assets or current liabilities).
AND 100% CORRECT ANSWERS
GRADED A+.
What are the most important things included in statement of cash flows? - Answer 1.
Operating Activities (start with net income) -> then net cash
2. Investing Activities -> then net cash
3. Financing Activities -> then net cash
4. Net Change in Cash (Increase or Decrease)
5. Ending, Opening, Net Change in Cash
6. Supplemental Cash Flow Information (Ex. Cash paid for interest)
How to calculate cash flow from operating? - Answer ADD
1. Net income +
2. Depreciation/ depletion/ amortization expense +
3. Loss on sale of long-term assets (decrease in inventory) +
4. Decreases in current assets other than cash (A/R) +
5. Increases in current liabilities (payables) +
LESS
1. Gain on sale of long-term assets -
2. Increases in current assets other than cash -
3. Decreases in current liabilities =
TOTAL CASH FLOW FROM OPERATING
How to calculate cash flow from investing? - Answer ADD
1. Sales of non-current assets +
2. Sales of non-current investments +
3. Collections of notes receivable +
LESS
1. Purchases of non-current assets -
2. Purchases of non-current investments -
, 1. Issuance of shares +
2. Borrowing funds +
LESS
1. Repurchase of shares -
2. Payments of notes and bonds payable -
3. Payments of dividends =
TOTAL CASH FLOW FROM FINANCING
How to find dividends declared? - Answer Beg R/E + Net Income - Dividends Declared = Ending
R/E
How to find dividends payable? - Answer (Beg Balance of dividends payable + Dividends
declared) - Dividends paid during the year = Ending Balance of dividends payable
How to find cash collected from customers? - Answer A/R end of last year + Sales - Cash
collected from customers = A/R end of this year
How to find purchases? - Answer Inventory end of last year + Purchases - COGS = Inventory
end of this year
How to find cash paid to suppliers? - Answer A/P end of last year + Purchases - Amount paid to
suppliers = A/P end of this year
How to find change in long term debt? - Answer Net borrowings = Issuances of debt -
repayment of debt
Beg Long-term debt + New debt - Payments = Ending Long-term debt
How to find net change in S/E? - Answer Net income - Dividends Paid + Common Shares Issued
- Common Shares Repurchased = Changes in S/E
What are Operating, Investing , and Financing Activities? - Answer Operating
- Day-to-day business activities (Ex. Collection of accounts receivables, increases/decreases in
current assets or current liabilities).
