Normally computed as cash flow from operations per share.
cash flows from financing activities
The section of the statement of cash flows that reports cash flows from transactions affecting the equity and debt of the business.
cash flows from investing activities
The section of the statement of cash flows that reports cash flows from transactions affecting investments in noncurrent assets.
cash flows from operating activities
The section of the statement of cash flows that reports the cash transactions affecting the determination of net income.
direct method
A method of reporting the cash flows from operating activities as the difference between the operating cash receipts and the operating cash payments.
free cash flow
The amount of operating cash flow remaining after replacing current productive capacity and maintaining current dividends.
indirect method
A method of reporting the cash flows from operating activities as the net income from operations adjusted for all deferrals of past cash receipts and payments and all accruals of expected future cash receipts and payments.
statement of cash flows
A summary of the cash receipts and cash payments for a specific period of time, such as a month or a year.
The statement of cash flows is not one of the basic financial statements
False
Cash flows from investing activities, as part of the statement of cash flows, include payments for the purchase of treasury stock.
False
Cash flows from investing activities, as part of the statement of cash flows, include receipts from the issuance of bonds payable.
False
There are two alternatives to reporting cash flows from operating activities in the statement of cash flows:
1) The direct method
2) The indirect method
True
The main disadvantage of the direct method of reporting cash flows from operating activities is that the necessary data are often costly to acccumulate.
True
The acquisition of land in exchange for common stock is an example of noncash investing and financing activity.
True
A cash flow per share amount should be reported on the statement of cash flows.
False
Using the indirect method, if land costing $85,000 was sold for $145,000, the amount reported in the financing activities section of the statement of cash flows would be $85,000.
False
Under the indirect method, expenses that do not affect cash are added to net income in the operating activities section of the statement of cash flows.
True
The manner of reporting cash flows from investing and financing activities will be different under the direct method as compared to the indirect method.
False
Identify the section of the statement of cash flows in which the following would appear:
Issued Common Stock
Financing
Identify the section of the statement of cash flows in which the following would appear:
Redeemed Bonds
Financing
Identify the section of the statement of cash flows in which the following would appear:
Issued preferred stock
Financing
Identify the section of the statement of cash flows in which the following would appear:
Purchased patents
Investing
Identify the section of the statement of cash flows in which the following would appear:
Net Income
Operating
Identify the section of the statement of cash flows in which the following would appear:
Paid cash dividends
Financing
Identify the section of the statement of cash flows in which the following would appear:
Purchased treasury stock
Financing
Identify the section of the statement of cash flows in which the following would appear:
Sold long-term investment
Investing
Identify the section of the statement of cash flows in which the following would appear:
Sold equipment
Investing
Identify the section of the statement of cash flows in which the following would appear:
Purchased Buildings
Investing
Identify the section of the statement of cash flows in which the following would appear:
Issued bonds
