Financial Accounting
9th Edition
ISBN: 9781259738692
Author: Libby
Publisher: MCG
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Chapter 12, Problem 7MCQ
To determine
Identify the item that would not be added when computing
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Students have asked these similar questions
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
Which of the following would be subtracted from net income when using the indirect method to derive net cash from operating activities?
a. Decrease in accounts payable
b. Loss on sale of investments
c. Decrease in accounts receivable
d. Depreciation expense
Which of the following should be deducted from net income in computing net cash flows from operating activities using the indirect method?
a.a decrease in accounts receivable
b.preferred dividends declared and paid
c.a decrease in accounts payable
d.a decrease in inventory
Chapter 12 Solutions
Financial Accounting
Ch. 12 - Prob. 1QCh. 12 - Prob. 2QCh. 12 - Prob. 3QCh. 12 - What are the major categories of business...Ch. 12 - Prob. 5QCh. 12 - Prob. 6QCh. 12 - Prob. 7QCh. 12 - Prob. 8QCh. 12 - Compare the two methods of reporting cash flows...Ch. 12 - Prob. 10Q
Ch. 12 - Prob. 11QCh. 12 - What are noncash investing and financing...Ch. 12 - Prob. 13QCh. 12 - Prob. 1MCQCh. 12 - Prob. 2MCQCh. 12 - Prob. 3MCQCh. 12 - Prob. 4MCQCh. 12 - Prob. 5MCQCh. 12 - Prob. 6MCQCh. 12 - Prob. 7MCQCh. 12 - Prob. 8MCQCh. 12 - Prob. 9MCQCh. 12 - Prob. 10MCQCh. 12 - Prob. 12.1MECh. 12 - Determining the Effects of Account Changes on Cash...Ch. 12 - Prob. 12.3MECh. 12 - Prob. 12.4MECh. 12 - Prob. 12.5MECh. 12 - Prob. 12.6MECh. 12 - Prob. 12.7MECh. 12 - Prob. 12.1ECh. 12 - Prob. 12.2ECh. 12 - Prob. 12.3ECh. 12 - Prob. 12.4ECh. 12 - Prob. 12.5ECh. 12 - Prob. 12.6ECh. 12 - Prob. 12.7ECh. 12 - Reporting and Interpreting Cash Flows from...Ch. 12 - Prob. 12.9ECh. 12 - Prob. 12.10ECh. 12 - Prob. 12.11ECh. 12 - Inferring Balance Sheet Changes from the Cash Flow...Ch. 12 - (Chapter Supplement B) Computing and Reporting...Ch. 12 - During the period, Sanchez Company sold some...Ch. 12 - Prob. 12.15ECh. 12 - Prob. 12.16ECh. 12 - Prob. 12.17ECh. 12 - Prob. 12.18ECh. 12 - Prob. 12.19ECh. 12 - Prob. 12.20ECh. 12 - Prob. 12.21ECh. 12 - (Chapter Supplement A) Reporting and Interpreting...Ch. 12 - Prob. 12.23ECh. 12 - Prob. 12.24ECh. 12 - Prob. 12.1PCh. 12 - Prob. 12.2PCh. 12 - Prob. 12.3PCh. 12 - Prob. 12.4PCh. 12 - Prob. 12.5PCh. 12 - (Chapter Supplement C) Preparing a Statement of...Ch. 12 - Prob. 12.1APCh. 12 - Prob. 12.2APCh. 12 - Prob. 12.3APCh. 12 - Prob. 12.1CONCh. 12 - Prob. 12.1CPCh. 12 - Prob. 12.2CPCh. 12 - Prob. 12.3CPCh. 12 - Prob. 12.4CPCh. 12 - Prob. 12.5CPCh. 12 - Prob. 12.6CP
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- In computing the periods net operating cash flows, why are noncash expenses added back to net income?arrow_forwardUnder the direct method of preparing a statement of cash flows, what adjustment is made for depreciation expense?arrow_forwardWhat adjustment(s) should be made to reconcile net income to net cash flows from operating activities (indirect method) considering the following balances in current assets?arrow_forward
- What categories of activities are reported on the statement of cash flows? Does it matter in what order these sections are presented?arrow_forwardWhen preparing the operating section of the statement of cash flows, using the indirect method, how must gains and losses be handled? Why?arrow_forwardWhat are two ways to report a companys net cash flow from operating activities? Briefly describe each method.arrow_forward
- In computing the periods net operating cash flows, why are increases in current liabilities and decreases in current assets added back to net income?arrow_forwardWhy is depreciation an addition in the operating section of the statement of cash flows, when prepared by the indirect method?arrow_forwardWhich of the following should be added to net income in calculating net cash flow from operating activities using the indirect method? a.a decrease in accounts payable b.an increase in inventory c.preferred dividends declared and paid d.a decrease in accounts receivablearrow_forward
- The method of presenting cash flow from operations where net income is adjusted for items without any cash effect is called a. direct method b. indirect method c. allowance method d. reconciliation methodarrow_forwardWhich of the following should be added to net income in calculating net cash flow from operating activities using the INDIRECT method? A. A decrease in accounts payable. B. A decrease in accounts receivable. C. Preferred dividends declared and paid. D. An increase in inventory.arrow_forwardWhich of the following items is reported on a statement of cash flows prepared using the direct method?a. Bad debts expense.b. Increase in accounts receivable.c. Depreciation expense.d. Cash payments to suppliers.arrow_forward
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