Question :
81. Although the guidance in U.S. GAAP and IFRS states a : 1245933
81. Although the guidance in U.S. GAAP and IFRS states a preference that companies present cash flows from operations using the _____, most companies present cash flows from operations as _____.
A. a reconciliation of net income to operating cash flow (the direct method); direct method
B. direct method; a reconciliation of net income to operating cash flow (the indirect method)
C. cash method; accrual method
D. accrual method; cash method
E. none of the above
82. The first section of the statement of cash flows derives cash flow from operations. Both U.S. GAAP and IFRS permit firms to report cash flow from operations using the __________.
A. direct method, only
B. indirect method, only
C. direct and indirect methods
D. adjustment method, only
E. income method, only
83. The first section of the statement of cash flows derives cash flow from _____ activities. The _____ method reports the amounts of cash received from customers less cash disbursed to suppliers, employees, lenders, and taxing authorities.
A. operating; direct
B. operating; indirect
C. investing; direct
D. investing; indirect
E. financing: direct
84. The _____ method begins with net income for a period and then shows adjustments to net income to convert revenues to cash received from customers and to convert expenses to cash disbursed to various suppliers of goods and services. Most companies use this method.
A. direct
B. indirect
C. adjustment
D. income
E. free cash
85. There are several types of adjustments required to compute cash flow from operations from net income. One adjustment is an addition to net income each year for _____ because it uses no cash during that period.
A. payments to employees
B. payments to suppliers
C. tax payments
D. depreciation and amortization
E. none of the above
86. The amount of cash a department store received from customers during a period equals the sales for the period, reduced by the _____ during this period or increased by the _____ during the period.
A. decrease in accounts payable; increase in accounts payable
B. increase in accounts payable; decrease in accounts payable
C. decrease in accounts receivable; increase in accounts receivable
D. increase in accounts receivable; decrease in accounts receivable
E. none of the above
87. Firms have some choice as to when they disburse cash. Delaying payments to suppliers and others during the last several days of an accounting period conserves cash and thereby _____ cash flow from operations for that period, and _____ cash flow from operations during the second period.
A. increases; decreases
B. increases; increases
C. decreases; ; increases
D. decreases; decreases
E. increases; has no effect
88. To prepare the statement of cash flows requires analyzing changes in balance sheet accounts during the accounting period. As an outcome of correct double-entry recording of all transactions, the net change in cash will be _____ the net change in all noncash accounts.
A. greater than
B. less than
C. equal to
D. greater than or be less than
E. greater than or be equal to
89. The statement of cash flows usually presents cash flow from operations in the _____ format, beginning with net income for the period. The statement then adjusts for revenues not providing cash, for expenses not using cash, and for changes in working capital accounts.
A. funds flow
B. direct
C. indirect
D. profit and loss
E. working capital
90. Which method of preparing the statement of cash flows is required by U.S. GAAP?
A. direct
B. indirect
C. funds flow
D. either direct or indirect may be used if appropriate note disclosure is included
E. either direct or funds flow may be used if appropriate note disclosure is included
