Quiz Ch 11 – T/F Purpose of Cash Flow Statement in Explaining Cash Balance Changes
Financial Accounting
Thomas, Tietz, and Harrison
12th Edition
The cash flow statement clarifies the changes in the cash balance during a specified period.
The cash flow statement clarifies the changes in the cash balance during a specified period.
A cash flow statement records a company’s cash inflows and outflows at a specific moment.
If interest payable increases during the reporting period, it suggests that the cash paid for interest was higher than the interest expense reported on the income statement.
In the statement of cash flows, the net cash provided by operating activities is usually the same as the operating income.
How is the purchase of treasury stock reported on a statement of cash flows?
The balance sheet is the sole financial statement utilized for the preparation of the statement of cash flows.
Financing activities on the cash flow statement are crucial as they generate the most cash inflows for most companies.
The cash flow statement covers a specific timeframe.
In the preparation of the statement of cash flows using the indirect method, deducting depletion expense from net income is required in determining the net cash provided by operating activities.
When preparing the statement of cash flows using the indirect method, the net cash provided by operating activities is calculated by adding the loss on the sale of long-term assets to net income.