Chpt 20 HW questions ACCT370

Which of the following financial statements is generally prepared first? Choose Income statement. Id never be reported in the income Balance sheet. Statement of retained earnings. Statement of cash flows. Cash flows are grouped in the statement of cash flows into the following major

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

Which of the following statements is incorrect regarding the investing activities section of the statement of cash flows? Multiple Choice Investing activities deal with long-term liabilities (debt) and equity accounts. Increases in long-term asset balances suggest cash outflows to purchase assets. Decreases in long-term asset balances suggest cash inflows from selling assets. Investing activities involve cash purchases and cash disposals of long-term assets. X

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

How to treat interest expense when preparing a Statement of Cash flows? Interest paid is reported as a cash outflow in the operating activities section on the statement of cash flows prepared under the indirect method. Answer: False. But why?

Which one of the following statements best describes a cash outflow in relation to the statement of cash flows? A: A cash outflow is an expense. B: A cash outflow may have been paid or not. C: A cash outflow is associated to both revenue and capital expenditure. D: None of the above

Explain your answer And do not give plagiarism answer

Which of the following is NOT a reason why cash flow may not equal net income? O a. Capital expenditures are not recorded on the income statement. O b. Changes in inventory will change cash flows but not income. O c. Amortization is added in when calculating net income. O d. Depreciation is deducted when calculating net income.

Which statement is incorrect? Under cash basis of accounting, * A. the matching principle is ignored.B. if cash is collected, revenue is recorded regardless of earning process.C. revenue is recognized when the receivable is initially recordedD. the projection of the timing and amounts of future cash flows is less accurate than under accrual accounting.E. none of the above

Cash collected from customers is a cash flow from operating activities and is calculated when using the indirect method for preparing the statement of cash flows. Is it true or false? Please explain your answer And do not give plagiarized answer

Concept introduction: Cash flow statement: Cash Flow statement: The Cash flow statement shows the movement of cash during a particular period. The Cash flows are categorized into three  categories as follows: * Cash flows from operating activities. * cash flows from investing activities. * Cash flows from financing activities. To choose: The false statement regarding the statement of cash flows.

Which of the following would not be added to net income in calculating cash flows from operating activities on a statement of cash flows prepared using the indirect method? Multiple Choice A decrease in Accounts Receivable. Amortization Expense. A gain on sale of equipment. An increase in Salaries and Wages Payable.

Which item could normally be treated similarly under both cash basis and accrual basis of accounting? *A. salesB. depreciationC. doubtful accountsD. income other than salesE. answer not given

Statement 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?

Which of the following would be subtracted from net income when using the indirect method to derive net cash from operating activities? a. Decrease in accounts payable b. Loss on sale of investments c. Decrease in accounts receivable d. Depreciation expense

Which of the following statements about accruals is true?  Select one: A. All accrual accounting adjustments are value irrelevant B. Accrual income is less relevant than cash flow C. Accruals cannot be manipulated D. Accruals are less reliable than cash flows

True or False 2. Non-financial institutions have the option of classifying interest income received as either investing activities of operating activities. 3. Cash flows relating to income and expenses are normally classified as investing activities in the statement of cash flows. 4. Only transactions that have affected cash and cash equivalents are included in the statement of cash flows. Non-cash transactions are excluded and disdosed only. 5. According to PAS 7, the indirect method of presenting cash flows relating to operating activities shows each major dass of gross cash receipts and gross cash payments.

CHOICES A. Only Statement I is correctB. Only Statement II is falseC. Statements II and III are falseD. Only Statement III is falseE. All statements are correct

In a cash flow statement which one of the following would appear as an inflow of cash? O The profit on sale of a fixed asset. A repayment of debenture loans. An issue of shares at a premium, An increase in stock during the year.

Plz explain in detail