Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Question
Chapter 17, Problem 30P
To determine
Identify the correct option out of the given statements.
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Which of the following statements is correct concerning a governmental entity’s combined statement of cash flows?a. Cash flows from capital financing activities are reported separately from cash flows from non-capital-related financing activities.b. The statement format is the same as that of a business enterprise’s statement of cash flows.c. Cash flows from operating activities may be reported using the indirect method.d. The statement format includes columns for the general, governmental, and proprietary fund types.
Which of the following statements is incorrect concerning a governmental entity’s statement of cash flows? a. Cash flows from capital financing activities and cash flows from noncapital financing activities are reported separately. b. The statement format is the same as that of a business enterprise’s statement of cash flows. c. Cash flows from operating activities may not be reported using the indirect method. d. The cash flows statement is not prepared by the general fund.
Which of the following is true about the statement of cash flows for the proprietary funds of a state or local government?
The indirect method of reporting cash flows from operating activities is allowed although the direct method is recommended.
The structure of the statement is virtually identical to that of a for-profit business.
The statement is divided into four separate sections of cash flows.
Amounts spent on capital assets are reported in a separate section from amounts raised to finance those capital assets.
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- Categorize the following as source or use of funds. Also classify them under operating,investing and financing activities sections of cashflow statement (indirect method)a. Selling a piece of land b. Dividend paid c. payment of some accrued taxesd. reducing inventory level e. Depreciation charges f. Sale of government bondsarrow_forwardWith respect to the statement of cash flows A.) Both the FASB and the GASB encourage entities to use the direct method B.) The GASB, but not the FASB, requires entities to use the direct method C.) The FASB, but not the GASB, requires entities to use the direct method D.) Both the FASB and the GASB require entities to use the direct methodarrow_forwardWhich of the following is true regarding the government-wide financial statements?a. The government-wide financial statement includes a statement of cash flows.b. The government-wide financial statements are prepared on the financial resources measurement focus for governmental activities and the economic resources measurement focus for business-type activities.c. The government-wide financial statement includes a statement of net position.d. Infrastructure assets must be depreciated on the statement of activities.arrow_forward
- The statement of cash flows of a not-for-profit should be divided into which of the following categories of cash flows? A.) Operating activities, noncapital financing activities, capital and related financing activities, investing activities B.) Operating activities, capital activities, investing activities C.) Operating activities, financing activities, capital activities D.) Operating activities, financing activities, investing activitiesarrow_forwardAccess the FASB Accounting Standards Codification at the FASB website ( asc.fasb.org ). Determine the specific citation for accounting for each of the following items: 1. Disclosure of interest and income taxes paid if the indirect method is used. 2. Primary objectives of a statement of cash flows. 3. Disclosure of noncash investing and financing activities.arrow_forwardWhich of the following is not a GASB's required statement for proprietary funds? A.) Statement of net position B.) Statement of revenues, expenses, and changes in fund net position C.) Statement of cash flows D.) Statement of changes in fund net positionarrow_forward
- Discuss the differences between governmental statements of cash flows prepared for proprietary funds and cash flow statements prepared by nonprofit entities.arrow_forwardPlease answer questions CASH BASIS VS ACCRUAL BASIS The IPSASB developed the IPSASs for government entities and departments who use the fund or cash accounting in recording and reporting transactions. Using the principles, concepts and definitions set out by the IPSASB explain in details the differences between Cash Basis and Accrual Basis (where applicable, use examples to support your answers), and the reasons why there is a move from the Cash Basis to the Accrual Basis.arrow_forwardThe IPSASB developed the IPSASs for government entities and departments who use the fund or cash accounting in recording and reporting transactions. Using the principles, concepts and definitions set out by the IPSASB explain in detail the differences between Cash Basis and Accrual Basis (where applicable, use examples to support your answers), and the reasons whythere is a move from the Cash Basis to the Accrual Basis.arrow_forward
- What are the differences between a cash flows statement prepared for a governmental electric utility versus one prepared for an investor-owned utility? What are five types of information must be presented in Management’s Discussion and Analysis (MD&A)? Which financial statement is each type of information derived from, if any? GASB Statement No. 34 mandates that the government reconcile total governmental fund balances per the fund balance sheet with net assets of governmental activities per the government-wide statements. What are likely to be the two largest reconciling items for most major cities? Why?arrow_forwardThe IPSASB developed the IPSASs for government entities and departments who use the fund or cash accounting in recording and reporting transactions. Using the principles, concepts and definitions set out by the IPSASB explain in details the differences between Cash Basis and Accrual Basis , and the reasons why there is a move from the Cash Basis to the Accrual Basis.arrow_forwardIf a company has both an inflow and outflow of cash related to property, plant, and equipment, the two cash effects can be netted and presented as one item in the investing activities section. cash inflow and cash outflow should be reported separately in the investing activities section. two cash effects can be netted and presented as one item in the financing activities section. cash inflow and cash outflow should be reported separately in the financing activities section.arrow_forward
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