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Match Each Transaction to of the Statement of Cash Flows

Question 83

Matching

Match each transaction to of the statement of cash flows in which it should be reported using the indirect method from the reporting categories

Premises:

Responses:

Loss on sale of old equipment

Cash flows from operating activities—will be added to net income

Issuance of stock to pay off bonds payable

Cash flows from operating activities—will be subtracted from net income

Recorded amortization on intangible assets

Cash flows from investing activities—increase as a result of cash inflows

Sold trading investments at book value (no gain or loss)

Cash flows from investing activities—decrease as a result of cash outflows

Paid salaries expense for the current period

Cash flows from financing activities—increase as a result of cash inflows

Decrease in salaries payable

Cash flows from financing activities—decrease as a result of cash outflows

Acquired machinery by issuing bonds payable

Disclosed as a non-cash transaction in the notes

Cash flows are already included in net income - not necessary to separately report on statement of cash flows

Premises:

Loss on sale of old equipment

Issuance of stock to pay off bonds payable

Recorded amortization on intangible assets

Sold trading investments at book value (no gain or loss)

Paid salaries expense for the current period

Decrease in salaries payable

Acquired machinery by issuing bonds payable

Responses:

Cash flows from operating activities—will be added to net income

Cash flows from operating activities—will be subtracted from net income

Cash flows from investing activities—increase as a result of cash inflows

Cash flows from investing activities—decrease as a result of cash outflows

Cash flows from financing activities—increase as a result of cash inflows

Cash flows from financing activities—decrease as a result of cash outflows

Disclosed as a non-cash transaction in the notes

Cash flows are already included in net income - not necessary to separately report on statement of cash flows

Correct Answer:

Premises:

Responses:

Cash flows from operating activities—will be added to net income

Cash flows from operating activities—will be subtracted from net income

Cash flows from investing activities—increase as a result of cash inflows

Cash flows from investing activities—decrease as a result of cash outflows

Cash flows from financing activities—increase as a result of cash inflows

Cash flows from financing activities—decrease as a result of cash outflows

Disclosed as a non-cash transaction in the notes

Cash flows are already included in net income - not necessary to separately report on statement of cash flows

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