25.When using the indirect method to show operational activities in the Statement of Cash Flows, the company must explicitly disclose the amount of cash paid for Select one: a interests. b. interest and wages. c. interest and taxes. d. wages.

The system of preparing financial statements based on recording events when the cash is received and reporting expenses when the cash is paid is called: a. Accrual basis accounting. b. Operating cycle accounting. c. Cash basis accounting. d. Revenue recognition accounting. e. Current basis accounting.

Using the following answer keys, you are to identify in which activity each of the transactions is classified and its effect on cash flows. Cash Flow Classification.using the capital letter only: . .Operating Activity • L.Investing Activity • F..Financing Activity • OL.Operating and Investing Activity • N.Noncash Transaction Effect on Cash Flows.using the capital letter only: • .Increase • D.Decrease N.No Effect Transaction Cash Flow Classification Effect on Cash Flows Paid a cash dividend. Decreased accounts receivable. Increased inventory. Retired long-term debt with cash. Sold long-term securities at a loss. Issued stock for equipment. Decreased prepaid insurance. Purchased treasury stock with cash. Retired a fully depreciated truck (no gain or loss). Transferred cash to money market account.

3.  Using the following answer keys, you are to identify in which activity each of the transactions is classified and its effect on cash flows. Cash Flow Classification...using the capital letter only: O...Operating Activity I...Investing Activity F...Financing Activity OI...Operating and Investing Activity N...Noncash Transaction Effect on Cash Flows...using the capital letter only: I...Increase D...Decrease N...No Effect Transaction Cash Flow Classification Effect on Cash Flows Declared and paid a cash dividend.     Sold short-term trading securities at a gain.     Retired fully depreciated equipment.     Sold a machine at a loss.     Purchased long-term available-for-sale securities.     Decreased accounts receivable.     Purchased 90-day Treasury bill.     Incurred a net loss.     Declared and issued a stock dividend.     Sold treasury stock.

1.  The indirect method of presenting cash flows from operating activities begins with a listing of the inflows of cash from operating activities. a listing of the outflows of cash for operating activities. the balance in the Cash account. net income.     2.  The direct method of presenting cash flows from operating activities begins with a listing of the inflows of cash from operating activities. a listing of the outflows of cash for operating activities. the balance in the Cash account. net income.     3.  In the adjustments to convert net income to net cash flow from operating activities, which of the following would be added to net income? A decrease in accounts receivable. An increase in accounts payable. Depreciation expense. All of these choices.

Select the item that matches with the description. Descriptions a. Begins with net income and then lists adjustments to net income in order to arrive at operating cash flows. b. Item included in net income, but excluded from net operating cash flows. c. Net cash flows from operating activities divided by average total assets. d. Cash transactions involving lenders and investors. e. Cash transactions involving net income. f. Cash transactions for the purchase and sale of long-term assets. g. Purchase of long-term assets by issuing stock to seller. h. Shows the cash inflows and outflows from operations such as cash received from customers and cash paid for inventory, salaries, rent, interest, and taxes. Terms

Describe the purpose and structure of a statement of cash flows. How does it differ from a balance sheet or an income statement?

Which of the following would not be on the statement of cash flow? A. Cash flows from operating activities B. Cash flows from financing activities C. Cash flows from Contingent activities D. Cash flows from investing

On the statement of cash flows prepared by the indirect method, the Cash flows from operating activities section would include   a. receipts from the sale of investments   b. receipts from the issuance of capital stock   c. gains or losses on fixed assets   d. payments for cash dividends