Finance and Accounting for Managers Ch. 16

Statement of changes in financial positions Not one of the four basic financial statements.
Balance sheet A list of the assets, liabilities, and owner’s equity as of a specific date, usually at the close of the last day of a month or a year.
Income statement A summary of the revenue and expenses for a specific period of time, such as a month or a year.
Statement of cash flows A summary of the cash receipts and cash payments for a specific period of time, such as a month or a year. Deals with cash.
Cash and U.S. treasury bonds Which concept of cash is not appropriate to use in preparing the statement of cash flows?
Operating Financing cash (purchasing stock) or (paying off debt)
Financing issuing bonds, notes payable, preferred stock and common stock, paying cash dividends, repaying debt, and acquiring treasury stock
Investing selling: fixed assets, intangible assets, and investment; payments to purchase: fixed assets, intangible assets and investments
US treasury bond A government bond issued by the U.S. Treasury.
Par The monetary amount printed on a stock certificate. The face value of stock or other security, as distinct from its market value.
Preferred stock A class of stock with preferential rights over common stock. Entitles holder to fixed dividend, takes priority over common stock.
Common stock The stock outstanding when a corporation has issued only one class of stock. The shares entitling holder to dividends depending on the fortunes of the company. They receive one vote per share.
A separate schedule Preferred stock issued in exchange for land would be reported in the statement of cash flows in:
Cash flows from investing activities section Cash paid to purchase long-term investments would be reported in the statement of cash flows in:
Purchase of treasury stock Not found in a Schedule of Noncash Investing and Financing Activities, reported at the end of a Statement of Cash Flows:
Discarding an asset that had been fully depreciated Does not represent an outflow of cash and therefore would not be reported on the statement of cash flows as a use of cash
Issuance of long-term debt Represents an inflow of cash and therefore would be reported on the statement of cash flows
Financing Activities A ten-year bond issued at par for $250,000 cash. This transaction should be shown on a statement of cash flows under:
Financing activities Cash paid for preferred stock dividends should be shown on the statement of cash flows under:
Cash at the end of the year The last item on the statement of cash flows prior to the schedule of noncash investing and financing activities reports:
Issuance of common stock to acquire land A noncash investing and financing activity
The payment of cash to retire a long-term note Shown on a statement of cash flows under the financing activity section:
Investing activities A company purchases equipment for $32,000 cash. This transaction should be shown on the statement of cash flows under:
Cash flow per share is not required to be reported on any statement
Amortization of premium on bonds payable On the statement of cash flows prepared by the indirect method, the cash flows from operating activities section would include:
Calculating the net worth of a company The statement of cash flows is not useful for:
Financing activities Cash receipts received from the issuance of a mortgage notes payable would be classified as:
Operating, investing, and financing The order of presentation of activities on the statement of cash flows:
Issuing debt Financing activities include:
Collecting cash on loans made Investing activities include:
Operating activities Cash receipts from interest and dividends are classified as:
The cash flows from operating activities section Depreciation on factory equipment would be reported in the statement of cash flows prepared by the indirect method in:
A decrease in accounts receivable Added to net income in calculating net cash flow from operating activities using the indirect method:
Gain on sale of land Deducted from net income in calculating net cash flow from operating activities using the indirect method:
Borrowing money by issuing a six-month note Increases cash
Payments of dividends Not classified as an operating activity
An increase in accrued liabilities Added to net income in calculating net cash flow from operating activities using the indirect method:

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