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Match Each of the Following Items with the Appropriate Definitions

Question 240

Matching

Match each of the following items with the appropriate definitions.

Premises:

Responses:

A method of computing and reporting that involves adjusting net income by adding and subtracting items that that do not affect cash provided (used. by operating activities.

Financing activities

Transactions with a company's owners and creditors that include obtaining cash from issuing debt and repaying the amounts borrowed, and distributing cash to owners.

Indirect method

Activities that involve the production or purchase of merchandise and the sale of goods or services to customers, including expenditures related to administering the business.

Statement of cash flows

Transactions that include purchasing and selling plant assets and investments in debt and equity securities.

Operating activities

A financial statement that reports the cash inflows and cash outflows for an accounting period, and classifies those cash flows as operating, investing, or financing activities.

Investing activities

A method of computing and reporting the net cash provided (used. by operating activities that lists the major items of operating cash receipts, and then subtracts the major items of operating cash payments.

Direct method

Premises:

A method of computing and reporting that involves adjusting net income by adding and subtracting items that that do not affect cash provided (used. by operating activities.

Transactions with a company's owners and creditors that include obtaining cash from issuing debt and repaying the amounts borrowed, and distributing cash to owners.

Activities that involve the production or purchase of merchandise and the sale of goods or services to customers, including expenditures related to administering the business.

Transactions that include purchasing and selling plant assets and investments in debt and equity securities.

A financial statement that reports the cash inflows and cash outflows for an accounting period, and classifies those cash flows as operating, investing, or financing activities.

Responses:

Financing activities

Indirect method

Statement of cash flows

Operating activities

Investing activities

Direct method

Correct Answer:

Premises:

Responses:

A method of computing and reporting that involves adjusting net income by adding and subtracting items that that do not affect cash provided (used. by operating activities.

Transactions with a company's owners and creditors that include obtaining cash from issuing debt and repaying the amounts borrowed, and distributing cash to owners.

Activities that involve the production or purchase of merchandise and the sale of goods or services to customers, including expenditures related to administering the business.

Transactions that include purchasing and selling plant assets and investments in debt and equity securities.

A financial statement that reports the cash inflows and cash outflows for an accounting period, and classifies those cash flows as operating, investing, or financing activities.