Which one of the following is NOT an example of cash flows in operating activities according to direct method? Select one: a. Cash received from debtors b. Cash sales of goods and services c. Adding back depreciation expense d. Cash payment for purchase of inventories

Which one of the following is NOT an example of cash flows in operating activities according to direct method? Select one: a. Cash received from debtors b. Cash sales of goods and services c. Adding back depreciation expense d. Cash payment for purchase of inventories

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Explain how depreciation expense is reported in the Statement of Cash Flows using the indirect…

A: Definition: Statement of cash flows: Statement of cash flow is a financial statement that shows the…

Q: Select the item that matches with the description. Descriptions Terms a. Begins with net income and…

A: a. Begins with net income and then lists adjustments to net income in order to arrive at operating…

Q: How is a decrease in current liabilities handled? A. It is subtracted from current assets in the…

A: The correct option is (C) It is subtracted from net income in the cash flow from Operating…

Q: 1. The statement of cash flows classifies cash receipts and cash payments into two categories:…

A: Cash flow statement is a statement showing the inflow and outflow of cash in an organization. It is…

Q: If the indirect method is used, which of the following items appears on a statement of cash flows?…

A: Statement of Cash Flow -Statement of Cash flow includes three significant activities which are…

Q: Cash flows from operating activities with the indirect method include: A. changes in accounts…

A: Introduction:- A cash flow statement denotes total amount cash is inflows and cash outflows your…

Q: Which of the following is a correct classification on the statement of cash flows? O Interest paid…

A: Statement of cash flows: The statement of cash flows records all the sources and use of the cash in…

Q: What is the Indirect Method used when preparing the Statement of Cash Flows and please give me a few…

A: Indirect method: Under indirect method the net income is adjusted with the increase or decrease of…

Q: Which of the following should be deducted from net income in computing net cash flows from operating…

A: Introduction: Statement of cash flows: All cash in and out transactions in an accounting period is…

Q: Which of the following is an example of a cash outflow from a financing activity? a. Payment of…

A: Financing Activity is associated with the procurement and payment of funds. Outflow means payment of…

Q: Which of the following types of information is not provided by the statement of cash flows? Select…

A: Statement of cash flows: This statement reports all the cash transactions which are responsible for…

Q: The accuracy of the statement of cash flows can be verified by computing the change in the balance…

A: The cash flow statement is an essential part of the financial statements of the organization. It is…

Q: Which of the following statements about cash received prior to the recognition of revenue in the fi…

A: Cash received prior to the recognition of revenue in financial statement is prepaid income for which…

Q: Which of the following would be considered a cash outflow for investing activities? a. cash paid to…

A: The correct option is: (d) Cash paid to purchase equipment

Q: true or false A statement of cash flows prepared by the indirect method will disclose the cash…

A: Indirect method of cash flow statement involves a reconciliation from profit before tax, adjusting…

Q: We can separate cash return on assets into: a. Cash flow to sales and return on assets. b. Profit…

A: Cash return on assets is: = Cash flows / Average Assets

Q: Which of the following should be added to net income in calculating net cash flow from operating…

A: Cash flows from operating activities is a section in cash flow statement which shows all income and…

Q: Which of the following would not be on the statement of cash flows? a.cash flows from financing…

A: Statement of cash flows: Cash flow statement is also known as statement of cash flows. It is a…

Q: Which of the following cash flows would be included under the operating activities secton of the…

A: The cash flow statement is prepared to record the cash flow from various activities during the…

Q: Which of the following would not be added to net income in calculating cash flows from operating…

A: The question's central theme is to assess your grasp of the adjustments applied to net income when…

Q: If the Accounts Receivable balance increases during a period, how will this increase be recognized…

Q: When the Direct Method is used to report operating activities in the Statement of Cash Flows, the…

A: Cash flow refers to the movement of cash into or out of a business, investment, or financial product…

Question

Which one of the following is NOT an example of cash flows in operating activities according to direct method? Select one:

a. Cash received from debtors

b. Cash sales of goods and services

c. Adding back depreciation expense

d. Cash payment for purchase of inventories

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

(a) How are cash equivalents reported in the financial statements? (b) What are some examples of cash equivalents?
When using the indirect method of determining net cash flows from operating activities, how is warranty expense reported? Why? What other expenses are reported in a like manner?
The primary objective of the statement of cash flows is to provide information about a company's: O Cash receipts and disbursements. O Noncash financing and investing activities. O Financial position. O Profitability.
Which of the following is not an operating activity shown on the Statement of Cash Flows? Cash received from customers for cash sales Cash payment for equipment Cash received for payment on an accounts receivable Cash payments for insurance
Using the direct method of preparing the statement of cash flows, to determine the cash effects of operating activities, which of the following needs to be adjusted? a. Equity as reported in the balance sheet b. Long-term assets and liabilities from the balance sheet c. Net income d. Reported revenues and expenses
Selling equipment for cash is reported on the statement of cash flows undera. operating activities.b. investing activities.c. financing activities.d. noncash investing and financing activities
Which of the following items is deducted from net income to arrive at cash flow from operations when using the indirect method? a) Decrease in accounts payable b) Depreciation expense c) Amortization expense d) Decrease in accounts receivable
Can you give some explanation of why Amortization Expense is included as a source of cash in a cash flow statement?
How should significant non-cash transactions be reported in the statement of cash flows? a. They should be incorporated in the statement of cash flows in a section labeled, "Significant Noncash Transactions." O b. Such transactions should be incorporated in the section (operating, financing, or investing) that is most representative of the major component of the transaction. O c. These noncash transactions are not to be incorporated in the statement of cash flows. They appear in a note to the financial statements. O d. They should be handled in a manner consistent with the transactions that affect cash flows.
A reader of a statement of cash flows wishes to analyze the major classes of gross cash receipts and gross cash payments from operating activities. Which methods of reporting cash flows from operating activities will supply that information? Both the direct and indirect methods. Only the direct method. Only the indirect method. Neither method.
Net cash provided/used by operating activities can be determined using the __________ (cash, direct, indirect, non-cash, or T-account) method or the _________ (T-account, non-cash, direct, cash, or indirect) method. (Enter answers in alphabetical order.)
A use of cash from financing activities is: Group of answer choices A)Repayment of an account payable. b)Payment of interest. C)Cash used to buy equipment. D)Cash used to purchase treasury stock. E)None of the above