ScienceEconomicsChapter 12 example #10096
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Chapter 12 example #10096

Taryn Bennett avatar Taryn Bennett
2 September 2023
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22 test answers

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Free Cash Flow is not reported here.
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Statement of cash flows.
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Free Cash Flow equals Cash provided by operations less
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Capital Expenditures and Cash Dividends
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When using the indirect method to convert net income to net cash proved by operating activities, which of the following occurs?
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Increases in inventory and increases in prepaid expenses are added.
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Using the indirect method, how is patent amortization expense for the period reported?
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Added to Net Income
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Adjusts net income to find net cash provided by operating activities.
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Indirect Method
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This causes a change in cash during a period.
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Payment of an Accounts Payable
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An increase in accounts payables during a period will cause
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Expenses on an accrual basis to be greater than expenses on a cash basis.
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This describes the statement of cash flows most accurately.
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If the direct method is used, a supplementary schedule reconciling the net income to net cash from operating activities must still be provided.
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On a statement of cash flows worksheet, a decrease in cash is offset by
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A debit in the reconciling items.
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On a statement of cash flows, a conversion of bonds into common stock is reported in the
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Significant noncash activities.
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On the statement of cash flows, how are cash receipts from interest and dividends classified?
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As operating activities
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What is the most important category on the statement of cash flows?
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Cash Flows from Operating Activities
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What is most associated with financing activities?
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Issuing Debt
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What activity includes lending money and collecting on the loans.
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Investing Activities
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Why would employees be particularly interested in the statement of cash flow?
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It shows the flow of cash and whether the company has enough cash to meet its payroll.
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________ are generally NOT interested in the statement of cash flows.
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Government agencies
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What can occur if a company reports a net loss?
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It may still show a net increase in cash.
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When preparing a statement of cash flows, which item is NOT generally used?
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Adjusted Trial Balance
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The statement of cash flows helps investors to assess the entity's ability to pay ________.
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Dividends.
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The statement of cash flows helps investors to assess the entity's ability to ________.
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Generate Future Income
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The statement of cash flows helps investors to assess the entity's cash ________.
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Investing and financing transactions during the period
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The statement of cash flows helps investors to assess the entity's reasons for the difference in ________.
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Net income and net cash provided by operating activities.