Title Reading 20 Understanding Cash Flow Statements.pdf ✅

Question #1 of 98 Question ID: 1457484 Which of the following is CORRECT about the consideration of depreciation in the operations section of a cash flow statement? Direct Method Indirect Method A) Considers Considers B) Does not consider Considers C) Does not consider Does not consider Question #2 of 98 Question ID: 1457503 To convert an indirect statement of cash flows to a direct basis, the analyst would: A) add decreases in accounts receivables to net sales. B) subtract increases in inventory from cost of goods sold. C) add increases in accounts payable to cost of goods sold. Question #3 of 98 Question ID: 1457422 Which of the following items is NOT found in the financing cash flow part of the statement of cash flows? A) Change in long-term debt. B) Change in retained earnings. C) Dividends paid. Question #4 of 98 Question ID: 1462823
From Thorpe Company's cash flow statement, an analyst discovers that during the most recent period Thorpe spent $2 million on what the firm describes as "investment in capital improvements." If the analyst believes this expenditure will not give Thorpe any enduring benefit beyond the current period, the most appropriate adjustment is to: A) decrease CFO and increase CFI. B) increase CFO and decrease CFI. C) decrease both CFO and CFI. Question #5 of 98 Question ID: 1457461 To calculate cash received from customers, an analyst would most appropriately: A) add the change in accounts receivable to credit sales. B) subtract accounts receivable from gross sales. C) subtract the change in accounts receivable from net sales. Question #6 of 98 Question ID: 1457439 The sale of obsolete equipment would be classified as: A) financing cash flow. B) investing cash flow. C) operating cash flow. Question #7 of 98 Question ID: 1457417 Under U.S. GAAP, the actual coupon payment on a bond is reported on the statement of cash flow as: A) a financing cash outflow. B) an investing cash outflow. C) an operating cash outflow.
Question #8 of 98 Question ID: 1457476 A U.S. GAAP reporting company has the following changes in its balance sheet accounts: Net Sales $500 An increase in accounts receivable 20 A decrease in accounts payable 40 An increase in inventory 30 Sale of common stock 100 Repayment of debt 10 Depreciation 2 Net Income 100 Interest expense on debt 5 The company's cash flow from financing is: A) $100. B) -$10. C) $90. Question #9 of 98 Question ID: 1457464 Darth Corporation's net income was $1,200 in the most recent period. Its depreciation expense was $800 and its accounts receivable increased by $1,000. Based only on this information, cash flow from operating activities reported by Darth should be: A) $1,200. B) $2,200. C) $1,000. Question #10 of 98 Question ID: 1457450
Q According to U.S. Generally Accepted Accounting Principles (GAAP) and International Accounting Standards (IAS) GAAP, should dividends paid be treated as a cash flow from financing (CFF) or as a cash flow from operations (CFO)? U.S. GAAP IAS GAAP A) CFO CFF B) CFF or CFO CFO C) CFF CFF or CFO Question #11 of 98 Question ID: 1457481 Which of the following statements regarding depreciation expense in the cash flow statements is CORRECT? Depreciation is added back to net income when determining CFO using: A) either the direct or indirect methods. B) the direct method. C) the indirect method. Question #12 of 98 Question ID: 1457497