the requirements of a company, if it is engaged in a material non-cash transaction.

Question

Want to see the full answer?

Answer 1

Question

Chapter 12, Problem 8MC

To determine

To identify: the requirements of a company, if it is engaged in a material non-cash transaction.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Which of the following returns is consistent with contractual cash flows that are solely payments of principal and interest or SPPI? I. Return of passage of time II. Return for the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation III. Return for the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset IV. Return for amounts to cover expenses and a profit margin a. I, II, III, and IV b. I, II, and III c. I and IV only d. II and III only

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.

1. Which of the following will not be classified under operating activities in a cash flow statements?a. Cash receipts from sale of goods or rendering of services.b. Cash receipts from sale of equity and debt instruments of other entities held primarily for the purpose of being traded.c. Cash receipts from sale of equity instruments representing interests in joint ventures.d. Cash payments to employees for short-term employee benefits. 2. Which of the following is a correct computation of cash flows from operation using the indirect method? a. Profit less depreciation expense, add increase in accounts receivable, less increase in accounts payable. b. Profit less depreciation expense, add decrease in accounts receivable, deduct increase in accounts payable. c. Profit add depreciation expense, add decrease in accounts receivable, deduct increase in accounts payable. d. Profit add depreciation expense, add decrease in accounts receivable, less decrease in…