The ________ is able to show business activities that make the company’s cash increase or decrease.
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cash, cash equivalents, and restricted cash
Cash in the statement of cash flows includes:
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Cash equivalents
________ are short term, liquid investments purchased within three months of maturity.
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does not change near maturity
Cash equivalents are convertible to amounts of cash and the value of them ________.
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Restricted cash
________ must legally be set aside and is not used for day to day operations.
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operating, investing, and financing
Cash inflows and outflows correlate to ________ activities.
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positive
Cash inflows will be a _________ number.
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negative
Cash outflows will be a ________ number.
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Revenues and expenses
_________ on the income statement are the result of operating activities.
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Operating activities
_________ are day to day activities related to running a business.
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examples of operating activities
Collecting money, receiving dividends, and receiving interest are ________.
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Net Cash Provided by (used for) Operating Activities
The difference between inflows and outflows are the subtotal of the financial statement (operating) , which is called ________.
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current assets and liabilities
Operating activities cause changes in ________.
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investments
The purchase and disposal of investments and long lived assets are the result of cash flows from ________.
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examples of investing activities
The sale/disposal of equipment and sale/maturity of investments in securities are ________.
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Net Cash Provided by (used by) Investing Activities
The difference between inflows and outflows is the subtotal of the financial statement (investing), which is called ________.
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financing activities
The exchange of cash with stockholders and cash exchanges with lenders results in cash flows from ________.
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examples of financing activities
Borrowing from lenders through formal debt contracts and issuing stock to owners are both ________.
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Net Cash Provided by (used in) Financing Activities
The difference between inflows and outflows is the subtotal of the financial statement (financing).
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non-current liabilities or stockholders’ equity
Financing activities cause changes in ________ accounts.
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comparative balance sheets
The statement of cash flows use _________, which uses the beginning and ending balances to calculate the cash flows from activities.
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complete income statements
The statement of cash flows uses ________ to help calculate cash flows for operating activities.
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Additional data
________ is used in the statement of cash flows to show the affects of investing and financing activities.
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non-cash
Assets are split into cash and ________ assets.
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Change in cash = Change in (Liabilities + Stockholders’ Equity - Non cash Assets)
In this statement, the basic accounting equation (Assets = Liabilities + Stockholders’ Equity) is split to create the equation _______. The change in cash between the beginning and end of the year must be equal to the right side.
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\
Equation to calculate the change in balance sheet accounts:
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determine the change in each balance sheet account
The first step to the create the statement is to ________.
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identify the cash flows category to which each account relates
The second step to create the statement is to ________.
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summarize operating, investing, and financing activities
The last step to creating the statement is to make schedules that ________.
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Direct method and Indirect method
The two types of reports for operating cash flows:
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direct method
The ________ reports the total cash inflow or outflows from each major transaction.
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indirect method
The ________ eliminates the effects of items that don’t involve cash and includes items that do have cash effects.
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\
Equation to calculate net cash flow provided (used in) operating activities:
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Cash
________ is found at the bottom of the Statement of Cash Flows.
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Net income
________ is changed into operating cash flows.
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Accounts Receivable
An increase in ________ indicates sales on accounts were less than the collection of cash from customers while a decrease means sales on account were more than the collection of cash.
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Cash prepayments
________ increase prepaid expenses.
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expenses
Recording ________ decreases prepaid expenses.
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on account
Accounts Payable is increased by purchases _______.
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suppliers
Accounts Payable is decreased when payments are made to the _______.
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Accrued expenses
________ increases Accrued Liabilities.
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Payment of expenses
________ decreases Accrued Liabilities.
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long lived tangible and intangible assets
The investing activities section of this statement correlates to ________.
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Purchases
________ for property or equipment are considered increases.
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\ Disposals
________ of property or equipment are considered decreases.
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net cash from investing activities
Add together the purchases of tangible assets to calculate ________.
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Intangible assets
________ are effected by disposals, impairments, and amortization.
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owners
Dividends Payable goes to ________.
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financial institutions
Notes Payable goes to ________.
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financing activity section
Notes Payable, Bonds Payable, Common Stock, Retained Earnings, and Treasury Stock are examples of accounts found in the ________.
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reported separately
Cash inflows and outflows are ________.
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Net change
________ is combined with the initial cash balance to get the ending cash balance.
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balance sheet
The ending cash balance must be the same as the amount found on the ________.
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Non-cash investing and financing activities
_________ include material investing and financing transaction that didn’t have an effect on cash flows.
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introductory phase
During the __________, a company is in the process of being established. The company has negative net operating cash flows and negative investing cash flows.
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growth phase
The ________ indicates the evolution of the company. It has positive operating cash flows.
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maturity phase
At the _________, the company stabilizes. It has positive operating cash flows and is no longer expanding.
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decline phase
In the _________ (last phase), the company falls out. It has negative operating and financing cash flows, but positive investing cash flows.
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Seasonality
_________ means sales are occurring more during specific points of the years. It is one cause of deviation.
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corporate life cycle
The _________ (aka growth in sales), is the rapid sales of new companies. This is a cause of deviation and results in negative operating cash flows.
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change in revenues and expenses recognition
The __________ says that revenues must be recorded before providing a service and expense reports are delayed. They both increase net income and there is no affect on operating activities.
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Changes in working capital management
_________ measures to see if current assets exceed current liabilities. If current assets grow, operating cash flows are reduced.
Studied by 18 people
Note 
Flashcard (20)