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More Cash Flow….. Increase cash expenses by $60,000 -$60,000 ops - PowerPoint PPT Presentation


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1. Identify each of the following items as either a positive cash flow, negative cash flow, or no effect, and identify the dollar amount. Increase in Accounts Receivable by $5,000 - $5,000 ops Increase in Inventory by $10,000 - $10,000 ops Increase cash revenues by $100,000

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slide1

1. Identify each of the following items as either a positive cash flow, negative cash flow, or no effect, and identify the dollar amount.

    • Increase in Accounts Receivable by $5,000
      • - $5,000 ops
    • Increase in Inventory by $10,000
      • - $10,000 ops
    • Increase cash revenues by $100,000
      • + $100,000 ops
slide2

More Cash Flow…..

  • Increase cash expenses by $60,000
    • -$60,000 ops
  • Increase Accounts Paybable by $10,000
    • + $10,000 ops
  • Increase depreciation expense for tax purposes by $30,000
    • + $30,000
slide3

2. A statement of cash flows would be least useful in answering which of the following questions?

A) What was the average balance in the Cash account during the period?

B) Did operating activities result in a positive or negative net cash flow?

C) How much cash was provided or used by financing activities during the period?

D) Were cash dividends paid by the company more or less than the net cash flow from operations?

slide4

3. Which of the following transactions would increase the net cash flow from operating activities?

A) The collection of an account receivable from a customer.

B) The issuance of capital stock for cash at a price above par.

C) The purchase of a delivery truck by issuing a note payable.

D) The sale of equipment for cash at a gain.

slide5

4. Analysis of the investing activities section of the statement of cash flows will show

a. any sales or repurchases of stock.

b. whether the company is shrinking or growing.

c. how corporate growth is being funded.

d. to what extent day-to-day operations are affecting cash flow.

slide6

5. Which of the following transactions produces a cash outflow?

a. Increasing debt

b. Receipt of interest and/or dividends from loans and investments

c. Acquisition of treasury stock

d. Issuance of preferred or common stock for cash

slide7

6. Which of the following is not characteristic of the operating activities section of the statement of cash flows?

a. Begins with net income, followed by a list of adjustments

b. Adjusts income statement items from an accrual basis to a cash basis

c. Shows total cashflows

d. Adjusts for items of expense that do not require cash outflows