Which of the following is a correct statement? Beginning cash balance is equivalent to the previous period's ending cash balance. Total expenses/outflow does not include cost of goods sold. Cumulative surplus (deficit) is a sum of previous periods' surplus (deficit). A month's surplus (deficit) = cash outflows - cash inflows

Which of the following is a correct statement? Beginning cash balance is equivalent to the previous period's ending cash balance. Total expenses/outflow does not include cost of goods sold. Cumulative surplus (deficit) is a sum of previous periods' surplus (deficit). A month's surplus (deficit) = cash outflows - cash inflows

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter14: Statement Of Cash Flows

Section: Chapter Questions

Problem 10MCQ: An increase in inventories is deducted from net income to arrive at operating cash flow because a....

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An increase in inventories is deducted from net income to arrive at operating cash flow because a. cash payments to customers were larger than the purchases made during the period. b. purchases are larger than the cost of goods sold by the amount that inventories increased. c. cash payments to customers were less than the purchases made during the period. d. purchases are less than the cost of goods sold by the amount that inventories increased. e. All of these.
Jarem Company showed 189,000 in prepaid rent on December 31, 20X1. On December 31, 20X2, the balance in the prepaid rent account was 226,800. Rent expense for 20X2 was 472,500. Required: 1. What amount of cash was paid for rent in 20X2? 2. CONCEPTUAL CONNECTION What adjustment in prepaid expenses is needed if the indirect method is used to prepare Jarems statement of cash flows?
- Why does a decrease in receivable turnover create the need for cash fromoperating activities? - Why would ratios that include one balance sheet account and one incomestatement account such as receivable turnover or return on assets, bequestionable if they came from quarterly or other interim financial reports?
If the ending balance in accounts payable increases from one period to the next, which of the following is true? Cash payments to suppliers exceeded current period purchases. Cash payments to suppliers were less than current period purchases. Cash receipts from customers exceeded cash payments to suppliers. Cash receipts from customers exceeded current period purchases.
Determine the following (1-3):: 1. What is the excess (deficiency) of cash available for disbursements for December? 2. What is the net income for December? 3. What is the cash balance at the end of December?
The term cash as used on the statement of cash flows includes all the following EXCEPT: A) cash due from customers within 30 days. B) cash on hand. C) cash equivalents. D) cash in bank Which of the following statements accurately describes the statement of cash flows? A) It shows the relative proportion of debt and assets. B) It shows the link between accrual-based income and the cash reported on the balance sheet. C) It indicates when long-term debt will mature. D) It shows the link between book income and earnings per share. Which of the following is NOT a true statement about the statement of cash flows? A) It shows where cash came from and how it was spent. B) It reports why cash increased or decreased. C) It covers a specific span of time the same as the income statement. D) It shows how the profits or losses of the company were generated. Which one of the following is a principal function of the statement of cash flows? A) To predict future net income B) To…
Indicate whether each of the following would be added to or deducted from net income in determining net cash flow from operating activities by the indirect method:a. Increase in merchandise inventoryb. Increase in prepaid expensesc. Depreciation of fixed assetsd. Gain on disposal of fixed assetse. Amortization of patentf. Increase in notes payable due in 120 days to vendorsg. Increase in accounts payableh. Decrease in wages payablei. Decrease in notes receivable due in 60 days from customersj. Decrease in accounts receivablek. Loss on retirement of long-term debt
Which of the statements is Not True about operating cash flowsa) Depreciation expenses are subtracted from cash outflowsb) Increases in inventories are deducted from cost of the goods soldc) It is equal to cash collected from sales - cash outflows for production costs- cash outflows for operating expenses – cash outflows for financial expenses – cash outflows for taxesd) Increases in the trade receivables are deducted from net sales
Develop brief answers to each of the following questions: 1. Why does a decrease in receivable turnover create the need for cash from operating activities? 2. Why would ratiosthat include one balance sheet account and one income statement account, such as receivable turnover or return on assets, be qu estionable if they came from quarterly or other interim financial reports?
Using the indirect method, which of the following adjustments to convert net income to net cash provided by operating activities is correct? Add to Net Income Deduct from Net Income Prepaid Expenses increase decrease Taxes Payable decrease increase Inventory decrease increase Accounts Receivable increase decrease
The cash flows from operating activities are reported by the direct method on the statement of cash flows. Determine the following:a. If sales for the current year were $753,500 and accounts receivable decreased by $48,400 during the year, what was the amount of cash received from customers?b. If income tax expense for the current year was $50,600 and income tax payable decreased by $5,500 during the year, what was the amount of cash payments for income taxes?c. Briefly explain why the cash received from customers in (a) is different from sales.
The cash flows from (used for) operating activities are reported by the direct method on the statement of cash flows. Determine the following: a. If sales for the current year were $558,800 and accounts receivable decreased by $39,700 during the year, what was the amount of cash received from customers?$fill in the blank 1 b. If income tax expense for the current year was $38,900 and income tax payable decreased by $4,500 during the year, what was the amount of cash paid for income taxes?$fill in the blank 2 c. Briefly explain why the cash received from customers in part (a) is different from sales.Because the customers paid than the amount of sales for the period, cash received from customers sales made on account by $39,700 during the current year.