FA Final Questions

name the three sections of a statement of cash flows in order

operating, investing, and financing

True/False: a noncash investing activity should be disclosed in a note to the statement of cash flows or on a separate schedule

true

True/False: the cash flow on total assets ratio is not affected by accounting recognition and measurement

true

True/False: the cash flow on total assets ratio is computed by dividing cash flows from operations by average total assets

true

True/False: when preparing the operating activities section of the statement of cash flows using the indirect method, expenses with no cash outflows are added back to net income

true

what is the appropriate section in the statement of cash flows for reporting the purchase of equipment for cash

investing

what is the appropriate section in the statement of cash flows for reporting the cash payment of wages

operating

what is the first line in the operating activities section of the statement of cash flows using the indirect method?

net income

a machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash. What amount should be reported as a source of cash in the investing activities section?

$50,000

what 3 things are needed to prepare a statement of cash flows?

comparative balance sheet, income statement, and additional information