QUESTION 13 The indirect method for the preparation of the operating activities section of the statement of cash flows: O A. Separately lists each major item of operating cash receipts. B. Must not be used in all circumstances. OC. Separately lists each major item of operating cash payments. O D. Reports net income and then adjusts it for items necessary to determine net cash provided or used by operating activities. QUESTION 14 Which section of the statement of cash flows is used to report the purchase of a building by issuing a 9-month note payable? O A. Operating activities. OB. Financing activities. OC. Investing activities.

QUESTION 13 The indirect method for the preparation of the operating activities section of the statement of cash flows: O A. Separately lists each major item of operating cash receipts. B. Must not be used in all circumstances. OC. Separately lists each major item of operating cash payments. O D. Reports net income and then adjusts it for items necessary to determine net cash provided or used by operating activities. QUESTION 14 Which section of the statement of cash flows is used to report the purchase of a building by issuing a 9-month note payable? O A. Operating activities. OB. Financing activities. OC. Investing activities.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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IAS 7 Statement of cash flows allows entities to present cash flow from operating activities, using either indirect method or direct method. a. Explain why and how the following are adjusted when preparing the statement of cash flows following the indirect method • Depreciation/amortisation • Profit/loss on disposal • Interest receivable/investment income • Finance costs • Change in receivable • Change in inventory • Change in payables. b. The statement of cash flows is an important part of the financial statements. Outline the importance of statement of cash flows
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