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Match Each of the Following Items with the Appropriate Definitions

Question 178

Matching

Match each of the following items with the appropriate definitions.

Premises:

Responses:

A financial statement that reports the cash inflows and cash outflows for an accounting period,and classifies those cash flows as operating,investing,or financing activities.

Operating activities

Transactions with a company's owners and creditors that include obtaining cash from issuing debt and repaying the amounts borrowed,and obtaining cash from or distributing cash to owners.

Statement of cash flows

Transactions that include making and collecting notes receivable or purchasing and selling plant assets,or investments in other than cash equivalents and trading securities.

Direct method

A calculation of the net cash provided (used.by operating activities that lists the major items of operating cash receipts,and then subtracts the major items of operating cash payments.

Investing activities

Activities that involve the production or purchase of merchandise and the sale of goods or services to customers,including expenditures related to administering the business.

Financing activities

A calculation that reports net income and then adjusts the net income amount by adding and subtracting items that are necessary to yield net cash provided (used.by operating activities.

Indirect method

Premises:

A financial statement that reports the cash inflows and cash outflows for an accounting period,and classifies those cash flows as operating,investing,or financing activities.

Transactions with a company's owners and creditors that include obtaining cash from issuing debt and repaying the amounts borrowed,and obtaining cash from or distributing cash to owners.

Transactions that include making and collecting notes receivable or purchasing and selling plant assets,or investments in other than cash equivalents and trading securities.

A calculation of the net cash provided (used.by operating activities that lists the major items of operating cash receipts,and then subtracts the major items of operating cash payments.

Activities that involve the production or purchase of merchandise and the sale of goods or services to customers,including expenditures related to administering the business.

A calculation that reports net income and then adjusts the net income amount by adding and subtracting items that are necessary to yield net cash provided (used.by operating activities.

Responses:

Operating activities

Statement of cash flows

Direct method

Investing activities

Financing activities

Indirect method

Correct Answer:

Premises:

Responses:

A financial statement that reports the cash inflows and cash outflows for an accounting period,and classifies those cash flows as operating,investing,or financing activities.

Transactions with a company's owners and creditors that include obtaining cash from issuing debt and repaying the amounts borrowed,and obtaining cash from or distributing cash to owners.

Transactions that include making and collecting notes receivable or purchasing and selling plant assets,or investments in other than cash equivalents and trading securities.

A calculation of the net cash provided (used.by operating activities that lists the major items of operating cash receipts,and then subtracts the major items of operating cash payments.

Activities that involve the production or purchase of merchandise and the sale of goods or services to customers,including expenditures related to administering the business.

A calculation that reports net income and then adjusts the net income amount by adding and subtracting items that are necessary to yield net cash provided (used.by operating activities.