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Match Each of the Following Items with the Appropriate Definitions

Question 247

Matching

Match each of the following items with the appropriate definitions.

Premises:

Responses:

A method of computing and reporting 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.

Direct method

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.

Statement of cash flows

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

Operating activities

Transactions that include purchasing and selling plant assets and investments in debt and equity securities.

Indirect method

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.

Investing activities

A method of computing and reporting that involves adjusting net income by adding and subtracting items that that do not affect cash provided (used)by operating activities.

Financing activities

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 distributing cash to owners.

Transactions that include purchasing and selling plant assets and investments in debt and equity securities.

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 method of computing and reporting that involves adjusting net income by adding and subtracting items that that do not affect cash provided (used)by operating activities.

Responses:

Direct method

Statement of cash flows

Operating activities

Indirect method

Investing activities

Financing activities

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 distributing cash to owners.

Transactions that include purchasing and selling plant assets and investments in debt and equity securities.

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 method of computing and reporting that involves adjusting net income by adding and subtracting items that that do not affect cash provided (used)by operating activities.