Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
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Chapter 11, Problem 11.48Q
To determine
To describe: The manner in which accounts receivable affect Company C’s cash flow from operating activities for 2018.
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Students have asked these similar questions
How do Cramer’s accrued liabilities affect the company’s statement of cash flows for2018?a. They increase cash used by financing activities.b. They increase cash provided by operating activities.c. They increase cash used by investing activities.d. They don’t because the accrued liabilities are not yet paid
Which of the following would be classified as a use of cash?
a. An increase in depreciation.
b. A decrease in accounts receivable.
c. A decrease in accruals.
d. Both decrease in accounts receivable & decrease in accruals
e. All of these
Using the indirect method for preparing the statement of cash flows, which of the following would not be included as an adjustment to net income?
A decrease in Prepaid Insurance.
An increase in Accounts Payable.
An increase in Equipment.
An increase in Accounts Receivable.
None of the answer choices is correct.
→ Question 23
Which of the following is not an advantage of using the indirect method to prepare the statement of cash flows?
The indirect method provides a link between net income and cash flows from operating activities by reconciling the two amounts.
The indirect method typically takes less time to prepare than the direct method..
Accounting systems are better suited to generate information needed for the indirect method.
The indirect method is more accurate than the direct method.
None of the answer choices is correct.
Chapter 11 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Ch. 11 - Quick Check (Answers are given here) The statement...Ch. 11 - Prob. 2QCCh. 11 - Prob. 3QCCh. 11 - Which of the three types of activities reported on...Ch. 11 - Prob. 5QCCh. 11 - On the statement of cash flows, which of the...Ch. 11 - On the statement of cash flows, which of the...Ch. 11 - Prob. 8QCCh. 11 - Prob. 9QCCh. 11 - Which of the following transactions does not...
Ch. 11 - If the indirect method is used to calculate net...Ch. 11 - In 2018, Jubilee Company repurchased its own stock...Ch. 11 - Prob. 13QCCh. 11 - Prob. 14QCCh. 11 - Prob. 11.1ECCh. 11 - LO 1 (Learning Objective 1: Explain the purposes...Ch. 11 - Prob. 11.2SCh. 11 - Prob. 11.3SCh. 11 - Prob. 11.4SCh. 11 - (Learning Objective 2: Distinguish among...Ch. 11 - Prob. 11.6SCh. 11 - (Learning Objective 3: Prepare a statement of cash...Ch. 11 - Prob. 11.8SCh. 11 - (Learning Objective 3: Calculate financing cash...Ch. 11 - Prob. 11.10SCh. 11 - (Learning Objective 4: Calculate operating cash...Ch. 11 - Prob. 11.12SCh. 11 - Prob. 11.13SCh. 11 - Prob. 11.14SCh. 11 - Prob. 11.15AECh. 11 - (Learning Objectives 2, 3: Distinguish among...Ch. 11 - Prob. 11.17AECh. 11 - Prob. 11.18AECh. 11 - Prob. 11.19AECh. 11 - Prob. 11.20AECh. 11 - Prob. 11.21AECh. 11 - Prob. 11.22AECh. 11 - Prob. 11.23AECh. 11 - (Learning Objective 4: Prepare the statement of...Ch. 11 - Prob. 11.25AECh. 11 - Prob. 11.26BECh. 11 - (Learning Objectives 2, 3: Distinguish among...Ch. 11 - Prob. 11.28BECh. 11 - Prob. 11.29BECh. 11 - Prob. 11.30BECh. 11 - Prob. 11.31BECh. 11 - Prob. 11.32BECh. 11 - Prob. 11.33BECh. 11 - Prob. 11.34BECh. 11 - Prob. 11.35BECh. 11 - Prob. 11.36BECh. 11 - Prob. 11.37QCh. 11 - Prob. 11.38QCh. 11 - Prob. 11.39QCh. 11 - Prob. 11.40QCh. 11 - Prob. 11.41QCh. 11 - Prob. 11.42QCh. 11 - Prob. 11.43QCh. 11 - Prob. 11.44QCh. 11 - Prob. 11.45QCh. 11 - Prob. 11.46QCh. 11 - Prob. 11.47QCh. 11 - Prob. 11.48QCh. 11 - Prob. 11.49QCh. 11 - Prob. 11.50QCh. 11 - The book value of equipment sold during 2018 was...Ch. 11 - Prob. 11.52QCh. 11 - Prob. 11.53QCh. 11 - Prob. 11.54QCh. 11 - Prob. 11.55QCh. 11 - Prob. 11.56QCh. 11 - Prob. 11.57APCh. 11 - Prob. 11.58APCh. 11 - (Learning Objectives 2, 3: Prepare the statement...Ch. 11 - Prob. 11.60APCh. 11 - Prob. 11.61APCh. 11 - Prob. 11.62APCh. 11 - Prob. 11.63APCh. 11 - (Learning Objectives 2, 3, 4: Prepare the...Ch. 11 - Prob. 11.65APCh. 11 - Prob. 11.66BPCh. 11 - (Learning Objectives 2, 4: Prepare an income...Ch. 11 - (Learning Objectives 2, 3: Prepare the statement...Ch. 11 - Prob. 11.69BPCh. 11 - Prob. 11.70BPCh. 11 - Prob. 11.71BPCh. 11 - Prob. 11.72BPCh. 11 - Prob. 11.73BPCh. 11 - Prob. 11.74BPCh. 11 - Prob. 11.75CEPCh. 11 - Prob. 11.76CEPCh. 11 - Prob. 11.77CEPCh. 11 - Prob. 11.78SCCh. 11 - Prob. 11.79DCCh. 11 - Prob. 11.80DCCh. 11 - Ethical Issues Georgetown Motors is having a bad...Ch. 11 - Prob. 1FFCh. 11 - Prob. 1FA
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- If the balance in Prepaid Expenses increased during theyear, what action should be taken on the statement of cashflows when following the indirect method, and why?a. The change in the account balance should be subtractedfrom net income because the net increase in PrepaidExpenses did not impact net income but did reduce thecash balance.b. The change in the account balance should be added to netincome because the net increase in Prepaid Expenses didnot impact net income but did increase the cash balance.c. The net change in Prepaid Expenses should be subtractedfrom net income to reverse the income statement effectthat had no impact on cash.d. The net change in Prepaid Expenses should be added tonet income to reverse the income statement effect thathad no impact on cash.arrow_forwardmore than one answers is correct ( )Which of the following should NOT be added to net income in calculating net cash flow from operating activities using the indirect method? A an increase in inventory B a decrease in accounts payable C a decrease in accounts receivable D preferred dividends declared and paidarrow_forwardWhich of the following represents a source of cash in the investing section?A. sale of investmentsB. depreciation expenseC. decrease in accounts receivableD. decrease in bonds payablearrow_forward
- Which of the following will be reflected as a cash inflow in the statement of cash flows of an entity? A) Decrease in non-current loan B) Increase in inventory C) Decrease in accounts receivable D) Decrease in accounts payablearrow_forwardWhich of the following is a cash inflow? a. an increase in dividend payment b. a decrease in accrued liabilities c. a decrease in accounts receivable d. a decrease in accounts payablearrow_forwardWhich of the following represents a source of cash in the investing section? A. sale of investments B. depreciation expense C. decrease in accounts receivable D. decrease in bonds payablearrow_forward
- 24. Changes in balance sheet accounts are necessary fora.A typical ratio analysis.b.Pro forma balance sheet construction.c.Statement of cash flows construction.d.Profit and loss analysis.e.Pro forma income statement construction. 25. Which of the following would be classified as a use of cash?a.An increase in accounts payable.b.A decrease in marketable securities.c.A decrease in accounts receivable.d.An increase in retained earnings.e.An increase in inventories.arrow_forwardIf a company prepares an Indirect Method Statement of Cash Flows, which of the following items is not a proper adjustment to net income to arrive at cash flow from operating activities: Adding a decrease in Accounts Receivable Adding Bad Debt Expense Subtracting Gains from Sale of Investments Subtracting Loss on Sale of PP&Earrow_forwardWhen using the Indirect Method of preparing the Statement of Cash Flows, in the operating section, some accounts are added and some costs are subtracted. If you had to explain to someone why an increase in accounts receivable is subtracted and the opposite as to why a decrease In accounts recelvable is added, what information would you relay to them? (Include in your response the concept of accruals, FASB guidelines, sales and net income on the income statement, and the balance sheet). Answer should be in a paragraph form.arrow_forward
- An increase in accounts receivable would affect which section of the cash flow statement? choices: revenue activities investing activities operating activities financing activitiesarrow_forwardWhich of the following adjustments would NOT be made to net income when computing cash from operating activities? a.add an increase in Accrued Interest Payable b.deduct the purchase of store equipment c.add the reduction in Accounts Receivable d.add the decrease in Merchandise Inventoryarrow_forwardHow does a decrease in income taxes receivables on the balance sheet, impact cash flow? What is the journal entry to reflect this?arrow_forward
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