Question 1

An increase in accounts payable should be------to convert net income to cash flow from operating activities.

Accepted Answer

added

Question 2

The analyst of financial statements should consider cash flows over a period of time, looking at patterns of performance and exploring underlying causes of strength and weakness.

Accepted Answer

Yes, the analyst of financial statements should consider cash flows over a period of time, looking at patterns of performance and exploring underlying causes of strength and weakness. This helps in understanding the financial health and stability of a company.

Question 3

An increase in inventory should be------to convert net income to cash flow from operating activities.

Accepted Answer

subtracted

Question 4

Analyzing the statement of cash flows helps determine the future external financing needs of a business firm.

Accepted Answer

The statement of cash flows shows the inflows and outflows of cash for a given period, which can help a business determine if they need to obtain external financing to cover any cash shortfalls or fund future growth opportunities.

Question 5

A decrease in accounts receivable should be------to convert net income to cash flow from operating activities.

Accepted Answer

The answer of A decrease in accounts receivable should be------to...

Question 6

Repurchase of a firm's own shares is an investing cash outflow.

Accepted Answer

Repurchase of a firm's own shares is considered a financing cash outflow, as it relates to transactions with the firm's owners or shareholders.

Question 7

The________ ________ is one way to common size the cash flow statement.
For questions 5 through 10, insert the word "added" or "subtracted" in the blank.

Accepted Answer

The answer of The________ ________ is one way to common...

Question 8

Per FASB rules, firms may use the------method or the------method to calculate and present cash flow from operating activities.

Accepted Answer

The answer of Per FASB rules, firms may use the------method...

Question 9

The amounts on a cash flow statement cannot be manipulated.

Accepted Answer

While the amounts on a cash flow statement generally cannot be manipulated, there are ways in which a company may try to distort or obscure the true cash flow situation through creative accounting practices. For example, they may change the timing of when cash enters or exits the business, or they may try to hide certain expenses or debts. It is important to carefully analyze a company's cash flow statement to ensure that it accurately reflects the health and performance of the business.

Question 10

Depreciation and amortization should be------to convert net income to cash flow from operating activities.

Accepted Answer

The answer of Depreciation and amortization should be------to convert net...

Question 11

The statement of cash flows shows the changes in the balance sheet accounts between periods.

Accepted Answer

The statement of cash flows explains the inflows (receipts) and outflows (payments) of cash and cash equivalents within a certain time frame, which can help to explain changes in the balance sheet accounts. Therefore, the statement of cash flows indirectly shows changes in balance sheet accounts.

Question 12

Cash flows are segregated on a statement of cash flows by------activities,------activities, and------activities.

Accepted Answer

The answer of Cash flows are segregated on a statement...

Question 13

A change in the retained earnings account is the result of the________for the period and the payment of________ .

Accepted Answer

The answer of A change in the retained earnings account...

Question 14

Cash flow from operations represents the "cash" income from the company's business operations.

Accepted Answer

Cash flow from operations is the cash generated from a company's primary activities, such as sales of goods and services, and is a crucial measure of a company's financial health.

Question 15

Cash from sales of property, plant and equipment is considered an operating activity on the cash flow statement.

Accepted Answer

Cash from sales of property, plant and equipment is considered an investing activity on the cash flow statement.

Question 16

A gain on sale of asset should be------to convert net income to cash flow from operating activities.

Accepted Answer

The answer of A gain on sale of asset should...

Question 17

A decrease in accrued liabilities should be------to convert net income to cash flow from operating activities.

Accepted Answer

The answer of A decrease in accrued liabilities should be------to...

Question 18

Cash outflows result from increases in asset accounts and decreases in liability and equity accounts.

Accepted Answer

Cash outflows occur when a company's asset accounts increase because it means the company is spending cash to acquire more assets. Similarly, when liability or equity accounts decrease, it indicates that cash is being used to reduce these accounts, such as paying off debt or distributing dividends, leading to a cash outflow.

Question 19

An analysis of the statement of cash flows should, at a minimum, cover the following areas: analysis of cash inflows, analysis of cash outflows, and an analysis of the structure of asset and liabilities.

Accepted Answer

An analysis of the statement of cash flows typically covers analysis of cash inflows, analysis of cash outflows, and the net change in cash position, but not specifically the structure of assets and liabilities, which is more directly analyzed through the balance sheet.

Question 20

Proceeds from borrowing are a financing cash outflow.

Accepted Answer

Proceeds from borrowing are considered a financing cash inflow because they increase the company's cash balance when the company receives funds from the borrowing.

Quiz 4: Statement of Cash Flows

An increase in accounts payable should be------to convert net income to cash flow from operating activities.

The analyst of financial statements should consider cash flows over a period of time, looking at patterns of performance and exploring underlying causes of strength and weakness.

An increase in inventory should be------to convert net income to cash flow from operating activities.

Analyzing the statement of cash flows helps determine the future external financing needs of a business firm.

A decrease in accounts receivable should be------to convert net income to cash flow from operating activities.

Repurchase of a firm's own shares is an investing cash outflow.

The is one way to common size the cash flow statement. For questions 5 through 10, insert the word "added" or "subtracted" in the blank.

Per FASB rules, firms may use the------method or the------method to calculate and present cash flow from operating activities.

The amounts on a cash flow statement cannot be manipulated.

Depreciation and amortization should be------to convert net income to cash flow from operating activities.

The statement of cash flows shows the changes in the balance sheet accounts between periods.

Cash flows are segregated on a statement of cash flows by------activities,------activities, and------activities.

A change in the retained earnings account is the result of thefor the period and the payment of .

Cash flow from operations represents the "cash" income from the company's business operations.

Cash from sales of property, plant and equipment is considered an operating activity on the cash flow statement.

A gain on sale of asset should be------to convert net income to cash flow from operating activities.

A decrease in accrued liabilities should be------to convert net income to cash flow from operating activities.

Cash outflows result from increases in asset accounts and decreases in liability and equity accounts.

An analysis of the statement of cash flows should, at a minimum, cover the following areas: analysis of cash inflows, analysis of cash outflows, and an analysis of the structure of asset and liabilities.

Proceeds from borrowing are a financing cash outflow.

Quiz 4: Statement of Cash Flows

An increase in accounts payable should be------to convert net income to cash flow from operating activities.

The analyst of financial statements should consider cash flows over a period of time, looking at patterns of performance and exploring underlying causes of strength and weakness.

An increase in inventory should be------to convert net income to cash flow from operating activities.

Analyzing the statement of cash flows helps determine the future external financing needs of a business firm.

A decrease in accounts receivable should be------to convert net income to cash flow from operating activities.

Repurchase of a firm's own shares is an investing cash outflow.

The________ ________ is one way to common size the cash flow statement. For questions 5 through 10, insert the word "added" or "subtracted" in the blank.

Per FASB rules, firms may use the------method or the------method to calculate and present cash flow from operating activities.

The amounts on a cash flow statement cannot be manipulated.

Depreciation and amortization should be------to convert net income to cash flow from operating activities.

The statement of cash flows shows the changes in the balance sheet accounts between periods.

Cash flows are segregated on a statement of cash flows by------activities,------activities, and------activities.

A change in the retained earnings account is the result of the________for the period and the payment of________ .

Cash flow from operations represents the "cash" income from the company's business operations.

Cash from sales of property, plant and equipment is considered an operating activity on the cash flow statement.

A gain on sale of asset should be------to convert net income to cash flow from operating activities.

A decrease in accrued liabilities should be------to convert net income to cash flow from operating activities.

Cash outflows result from increases in asset accounts and decreases in liability and equity accounts.

An analysis of the statement of cash flows should, at a minimum, cover the following areas: analysis of cash inflows, analysis of cash outflows, and an analysis of the structure of asset and liabilities.

Proceeds from borrowing are a financing cash outflow.

The is one way to common size the cash flow statement. For questions 5 through 10, insert the word "added" or "subtracted" in the blank.

A change in the retained earnings account is the result of thefor the period and the payment of .