Which of the following sentences regarding the statement of cash flows is false?a. The statement of cash flows describes the company’s cash receipts and cash paymentsfor a period of time.b. The statement of cash flows reconciles the beginning and ending cash balances shownon the balance sheet.c. The statement of cash flows reports cash flows in three categories: cash flows frombusiness activities, cash flows from investing activities, and cash flows from financingactivities.d. The statement of cash flows may be used by creditors to assess the creditworthiness of acompany.

A reader of a statement of cash flows wishes to analyze the major classes of gross cash receipts and gross cash payments from operating activities. Which methods of reporting cash flows from operating activities will supply that information? Both the direct and indirect methods. Only the direct method. Only the indirect method. Neither method.

When preparing a statement of cash flows, cash equivalents are subtracted from cash in order to calculate the net change in cash during a period. True False

Which of the following is not a use of the statement of cash flows? a.Helps creditors analyze the company's operations. b.Provides information about the sources of cash flows. c.Measures how efficiently the company's cash resources are being used. d.Provides insights into the quality and reliability of reported income.

The statement of cash flows is normally a required basic financial statement for each period for which an earnings statement is presented. The statement should include a separate schedule listing the financing and investing activities not involving cash. Required: What are financing and investing activities not involving cash? What are two types of financing and investing activities not involving cash? Explain what effect, if any, each of the following seven items would have on the statement of cash flows. accounts receivable inventory depreciation deferred tax liability issuance of long-term debt in payment for a building payoff of current portion of debt sale of a fixed asset resulting in a loss or gain

Which of the following is the final step in preparing a spreadsheet (work sheet) for the statement of cash flows using the indirect method? Add the Debit and Credit Transactions columns and verify that the totals are equal. Analyze all noncash accounts and enter the net increase (decrease) in cash during the period. Add the Balance column totals, which should total to zero. After all noncash accounts have been analyzed, enter the net increase (decrease) in cash during the period.

Under the accrual basis of accounting: cash must be received before revenue is recognized. events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid or received. net income is calculated by matching cash outflows against cash inflows. the ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles.

State the section(s) of the statement of cash flows prepared by the indirect method (operating activities, investing activities, financing activities, or not reported) and the amount that would be reported for each of the following transactions: Note: Only consider the cash component of each transaction. Use the minus sign to indicate amounts that are cash out flows, cash payments, decreases in cash, or any negative adjustments. If your answer is not reported in an amount box does not require an entry, leave it blank or enter "0". a. Received $120,000 from the sale of land costing $70,000. Investing activities  $fill in the blank 2     Operating activities  $fill in the blank 4 b. Purchased investments for $75,000. Investing activities  $fill in the blank 6 c. Declared $35,000 cash dividends on stock. $5,000 dividends were payable at the beginning of the year, and $6,000 were payable at the end of the year. Financing activities  $fill in the blank 8 d. Acquired equipment for…

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