Cash Flow Statement(Flashcards)

This method of preparing the statement of cash flows is preferred by the FASB, but it is rarely used.

This is the remainder of 1) net cash flows from operating activities, minus 2) the required amount of capital expenditures. (Sometimes the dividends paid are also subtracted.)

The cash flows involving these activities are reported in the first section of the statement of cash flows.

The cash flows from these activities involve the noncurrent assets and are reported in the second section of the statement of cash flows.

The cash flows from these activities involve debt, noncurrent liabilities, and stockholders’ equity. They are reported in the third section of the statement of cash flows.

This part of the statement of cash flows reports the significant noncash transactions as well as the amounts paid for interest and income taxes.

Under the indirect method, this is the first amount shown in the operating activities section of the statement of cash flows.

This common expense is added to net income under the indirect method of preparing the statement of cash flows because it reduced net income but it did not use cash.

This tax related item is likely to appear in the supplementary disclosures for the statement of cash flows.

This balance sheet line reports a company’s cash, money market accounts and highly liquid investments which had a maturity date of three months or less when they were purchased.

This term is defined as highly liquid investments or accounts which had a maturity date of three months or less when they were purchased.

This is the amount of cash received when a noncurrent asset is sold. It is reported as a positive amount in the second section of the statement of cash flows.

This occurs when equipment is sold for more than its book value. The amount is deducted from net income in the operating activities section of the statement of cash flows using the indirect method.

This occurs when equipment is sold for less than its book value. The amount is added to the net income in the operating activities section of the statement of cash flows using the indirect method.

On the statement of cash flows these amounts represent cash received, a cash increase, a cash inflow, favorable for the company’s cash, etc.

On the statement of cash flows these represent cash paid, cash spent, a cash outflow, unfavorable for the company’s cash, etc.

The exchange of common stock for property is an example of these activities, which are part of the supplemental disclosures required for the statement of cash flows.

These are the amounts spent for additions to a company’s property, plant and equipment. They are presented as a negative amount in the second section of the statement of cash flows.

This amount is deducted from the cash from operating activities in computing the amount of free cash flow.

This is the net result of combining the positive and negative cash flow amounts shown in the third section of the statement of cash flows.

These cash flows are indicated by positive amounts on the statement of cash flows.

These cash flows are indicated by negative amounts (amounts in parentheses) on the statement of cash flows.

These are a distribution of cash to stockholders and are reported in parentheses in the financing activities section of the statement of cash flows.

This results in a cash outflow (reported in the financing activities section) when a corporation buys back its bonds from existing bondholders.

This is the net result of combining the positive and negative cash flow amounts shown in the first section of the statement of cash flows.

This is the net result of combining the positive and negative cash flow amounts shown in the second section of the statement of cash flows.

This is a judgment concerning a corporation’s net income after comparing it to the corporation’s cash from operating activities.