Income is defined as increases in assets or decreases in liabilities that result in decreases in equity, other than those relating to contributions from equity holders. 5 Information about financial performance is useful in predicting future performance and ability to generate future cash flows. 6 Cash flows arising from the purchase and sale of dealing or trading securities are classified as investing activities. Investing activities include cash flows from transactions involving operating assets. 8. Financing activities include the cash flows from transactions involving trade liabilities and equity of an entity. Expense is defined as decreases in assets or increases in liabilities that result in increases in equity, other than those relating to contributions from equity holders. 10. Cost is the amount of cash and cash equivalent paid and the fair value of the other consideration given to acquire an asset at the time of acquisition or construction. 11. Reporting period is either the period over which an asset is expected to be available for use by the entity, or the number of production or similar units expected to be obtained from the asset by the entity.

Income is defined as increases in assets or decreases in liabilities that result in decreases in equity, other than those relating to contributions from equity holders. 5 Information about financial performance is useful in predicting future performance and ability to generate future cash flows. 6 Cash flows arising from the purchase and sale of dealing or trading securities are classified as investing activities. Investing activities include cash flows from transactions involving operating assets. 8. Financing activities include the cash flows from transactions involving trade liabilities and equity of an entity. Expense is defined as decreases in assets or increases in liabilities that result in increases in equity, other than those relating to contributions from equity holders. 10. Cost is the amount of cash and cash equivalent paid and the fair value of the other consideration given to acquire an asset at the time of acquisition or construction. 11. Reporting period is either the period over which an asset is expected to be available for use by the entity, or the number of production or similar units expected to be obtained from the asset by the entity.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 26BE

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Similar questions

Which of these transactions would be part of the financing section? A. inventory purchased for cash B. sales of product, for cash C. cash paid for purchase of equipment D. dividend payments to shareholders, paid in cash
Which of the following represents a source of cash in the investing section? A. sale of investments B. depreciation expense C. decrease in accounts receivable D. decrease in bonds payable
In which section of the statement of cash flows would each of the following transactions be included? For each, identify the appropriate section of the statement of cash flows as operating (O), investing (I), financing (F), or none (N). (Note: some transactions might involve two sections.) A. collected accounts receivable from customers B. issued common stock for cash C. declared and paid dividends D. paid accounts payable balance E. sold a long-term asset for the same amount as purchased
Which is the proper order of the sections of the statement of cash flows? A. financing, investing, operating B. operating, investing, financing C. investing, operating, financing D. operating, financing, investing
Sources of cash include a. profitable operations. b. the issuance of long-term debt. c. the sale of long-term assets. d. the issuance of capital stock. e. All of these.
Which 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.
In which section of the statement of cash flows would each of the following transactions be included? For each, identify the appropriate section of the statement of cash flows as operating (O), investing (I), financing (F), or none (N). (Note: some transactions might involve two sections.) A. purchased stock in Xerox Corporation B. purchased office supplies C. issued common stock D. sold plant assets for cash E. sold equipment for cash