EBK ACCOUNTING PRINCIPLES
13th Edition
ISBN: 9781119411017
Author: Weygandt
Publisher: WILEY
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Question
Chapter 17, Problem 5ISTQ
To determine
Introduction: The
To choose: The correct statement from the given options.
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Students have asked these similar questions
Which statement is incorrect?
A. An entity shall report cash flows from operating activities either using direct or indirect method.
B. Interest payments to lenders should be classified as cash outflows for financing activities.
C. Cash receipts from commissions and other revenues are cash flows from operating activities.
D. The aggregate cash flows arising from acquisition of subsidiary should be classified as investing activities.
Which of the following returns is consistent with contractual cash flows that are SPPI?
Return for passage of time.
Return for the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.
Return for the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.
Return for amounts to cover expenses and a profit margin.
Group of answer choices
I, II and III only
I and IV only
I, II, III and IV
II and III only
Which of the following returns is consistent with contractual cash flows that are solely payments of principal and interest or SPPI?
I. Return of passage of time
II. Return for the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation
III. Return for the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset
IV. Return for amounts to cover expenses and a profit margin
a. I, II, III, and IV
b. I, II, and III
c. I and IV only
d. II and III only
Chapter 17 Solutions
EBK ACCOUNTING PRINCIPLES
Ch. 17 - Prob. 1QCh. 17 - Prob. 2QCh. 17 - Prob. 3QCh. 17 - Prob. 4QCh. 17 - Prob. 5QCh. 17 - Prob. 6QCh. 17 - 7. Why is it necessary to use comparative balance...Ch. 17 - 8. Contrast the advantages and disadvantages of...Ch. 17 - Prob. 9QCh. 17 - Prob. 10Q
Ch. 17 - Prob. 11QCh. 17 - Prob. 12QCh. 17 - Prob. 13QCh. 17 - Prob. 14QCh. 17 - Prob. 15QCh. 17 - Prob. 16QCh. 17 - Prob. 17QCh. 17 - Prob. 18QCh. 17 - Prob. 19QCh. 17 - Prob. 20QCh. 17 - Prob. 21QCh. 17 - Prob. 22QCh. 17 - Prob. 1BECh. 17 - Prob. 2BECh. 17 - Prob. 3BECh. 17 - Prob. 4BECh. 17 - Prob. 5BECh. 17 - Prob. 6BECh. 17 - Prob. 7BECh. 17 - Prob. 8BECh. 17 - BE17-9 Hinck Corporation reported net cash...Ch. 17 - BE17-10 Suppose in a recent quarter, Alliance...Ch. 17 - BE17-11 The management of Morrow Inc. is trying to...Ch. 17 - BE17-12 Suppose Columbia Sportswear Company had...Ch. 17 - Prob. 13BECh. 17 - Prob. 14BECh. 17 - Prob. 1DIECh. 17 - Prob. 2aDIECh. 17 - Prob. 2bDIECh. 17 - Prob. 3DIECh. 17 - Prob. 1ECh. 17 - E17-2 An analysis of comparative balance sheets,...Ch. 17 - Prob. 3ECh. 17 - Prob. 4ECh. 17 - Prob. 5ECh. 17 - Prob. 6ECh. 17 - Prob. 7ECh. 17 - Prob. 8ECh. 17 - Prob. 9ECh. 17 - Prob. 10ECh. 17 - Prob. 11ECh. 17 - E17-11 Suppose a recent income statement for...Ch. 17 - Prob. 13ECh. 17 - Prob. 14ECh. 17 - Prob. 1PSACh. 17 - Prob. 2PSACh. 17 - Prob. 3PSACh. 17 - Prob. 4PSACh. 17 - Prob. 5PSACh. 17 - Prob. 6PSACh. 17 - Prob. 7PSACh. 17 - P17-8A Data for Nosker Company are presented in...Ch. 17 - Prob. 9PSACh. 17 - Prob. 10PSACh. 17 - Prob. 11PSACh. 17 - Prob. 17CCCh. 17 - Prob. 2EYCTCh. 17 - Prob. 3EYCTCh. 17 - Prob. 4EYCTCh. 17 - Prob. 5EYCTCh. 17 - Prob. 7EYCTCh. 17 - Prob. 1ISTQCh. 17 - Prob. 2ISTQCh. 17 - Prob. 3ISTQCh. 17 - Prob. 4ISTQCh. 17 - Prob. 5ISTQCh. 17 - Prob. 1IFRECh. 17 - Prob. 2IFRECh. 17 - Prob. 3IFRP
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Similar questions
- Would there ever be activities that relate to operating, investing, or financing activities that would not be reported in their respective sections of the statement of cash flows? Explain. If a company had any such activities, how would they be reported in the financial statements, if at all?arrow_forwardWhich of the following statements is false? A. Noncash activities should be reported in accrual basis financial statements. B. Net cash flow from operating activities relates to normal business operations. C. Net income usually equals net cash flow from operating activities. D. The statement of cash flows is an essential part of the basic financial statements.arrow_forwardIf non-cash investing and financing activities are part cash and part non-cash, which of the following is true? a. Companies should report the non-cash component in a separate note and report the cash portion on the statement of cash flows. b. Companies should report only the cash portion on the statement of cash flows. c. Companies should report only the cash portion on the statement of cash flows and ignore the non-cash component. d. Companies should report the cash portion as the cash equivalent of the non-cash component on the statement of cash flows.arrow_forward
- Which of the following items would not appear in thefinancing section of the statement of cash flows?a. The issuance of the company’s own stock.b. The repayment of debt.c. The payment of dividends.d. All of the above would appear in the financing sectionof the statement of cash flows.arrow_forwardClassification of Cash Flows Related to the Cost of Financing. Under U.S. GAAP, the statement of cash flows classifies cash expenditures for interest expense on debt as an operating activity but classifies cash expenditures for dividends to shareholders as a financing activity. Justify this apparent paradox. Please explain without copying from another source.arrow_forwardStatement 1: Investing and financing transactions which do not require the use of cash should be excluded from the statement of cash flows, but they should be separately disclosed elsewhere in the financial statements. Statement 2:The indirect method adjusts accrual basis net profit or loss for the effects of non-cash transactions. Statement 3:Cash flows arising from taxes on income are normally classified as financing, unless they can be specifically identified with operating or investing activities. Statement 4:Guidance notes indicate that an investment normally meets the definition of a cash equivalent when it has a maturity of three months or less from the date of acquisition. Which of the statements above are correct?arrow_forward
- Under U.S. GAAP, the statement of cash flows classifies cash expenditures for interest expenseon debt as an operating activity but classifies cash expenditures for dividends to shareholdersas a financing activity. Justify this apparent paradox.arrow_forwardWhich of the following is not classified among the financing activities in a statement of cash flows? a Long-term borrowing. b Payment of dividends to stockholders. c Short-term borrowing. d Payment of interest to creditors.arrow_forward1. According to PAS 7, which of the following statement is incorrect? * a. Statement of Cash Flows requires an entity to present a statement of cash flows as an integral part of its primary financial statements b. Investing and financing transactions which do not require the use of cash should be excluded from the statement of cash flows, but they should be separately disclosed elsewhere in the financial statements c. Cash flows under operating activities are classified and presented either using the 'direct' or 'indirect' method d. None. All of the above statements are correctarrow_forward
- 1. Which of the following statements is CORRECT regarding the presentation of the statement of cash flows? a. Investing activities may be presented using the direct or indirect method. b. Financing activities shall be presented using the indirect method only. c. Operating activities may be presented using direct or the indirect method. d. Operating activities shall be presented using the direct method only. --- 2. Generally, dividends are presented as cash outflows from financing activities a. When declared b. When paid c. When recorded in the stock register d. When declared or recorded, whichever comes firstarrow_forward. All entities that prepare financial statements in conformity with PFRSs are required to present a statement of cash flows. * true or false?arrow_forwardOn the statement of cash flows, which of the following items will affect both financing activities and operating activities? O a. Collection of loans to other entities. O b. Payment of dividends. O c. Redemption of debt. O d. Issuance of equity securities.arrow_forward
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