Chapter 12: Statement of Cash Flows

The ________ is able to show business activities that make the company’s cash increase or decrease.

Cash in the statement of cash flows includes:

________ are short term, liquid investments purchased within three months of maturity.

Cash equivalents are convertible to amounts of cash and the value of them ________.

________ must legally be set aside and is not used for day to day operations.

Cash inflows and outflows correlate to ________ activities.

Cash inflows will be a _________ number.

Cash outflows will be a ________ number.

_________ on the income statement are the result of operating activities.

_________ are day to day activities related to running a business.

Collecting money, receiving dividends, and receiving interest are ________.

The difference between inflows and outflows are the subtotal of the financial statement (operating) , which is called ________.

Operating activities cause changes in ________.

The purchase and disposal of investments and long lived assets are the result of cash flows from ________.

The sale/disposal of equipment and sale/maturity of investments in securities are ________.

The difference between inflows and outflows is the subtotal of the financial statement (investing), which is called ________.

The exchange of cash with stockholders and cash exchanges with lenders results in cash flows from ________.

Borrowing from lenders through formal debt contracts and issuing stock to owners are both ________.

The difference between inflows and outflows is the subtotal of the financial statement (financing).

Financing activities cause changes in ________ accounts.

The statement of cash flows use _________, which uses the beginning and ending balances to calculate the cash flows from activities.

The statement of cash flows uses ________ to help calculate cash flows for operating activities.

________ is used in the statement of cash flows to show the affects of investing and financing activities.

Assets are split into cash and ________ 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.

Equation to calculate the change in balance sheet accounts:

The first step to the create the statement is to ________.

The second step to create the statement is to ________.

The last step to creating the statement is to make schedules that ________.

The two types of reports for operating cash flows:

The ________ reports the total cash inflow or outflows from each major transaction.

The ________ eliminates the effects of items that don’t involve cash and includes items that do have cash effects.

Equation to calculate net cash flow provided (used in) operating activities:

________ is found at the bottom of the Statement of Cash Flows.

________ is changed into operating cash flows.

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.

________ increase prepaid expenses.

Recording ________ decreases prepaid expenses.

Accounts Payable is increased by purchases _______.

Accounts Payable is decreased when payments are made to the _______.

________ increases Accrued Liabilities.

________ decreases Accrued Liabilities.

The investing activities section of this statement correlates to ________.

________ for property or equipment are considered increases.

________ of property or equipment are considered decreases.

Add together the purchases of tangible assets to calculate ________.

________ are effected by disposals, impairments, and amortization.

Dividends Payable goes to ________.

Notes Payable goes to ________.

Notes Payable, Bonds Payable, Common Stock, Retained Earnings, and Treasury Stock are examples of accounts found in the ________.

Cash inflows and outflows are ________.

________ is combined with the initial cash balance to get the ending cash balance.

The ending cash balance must be the same as the amount found on the ________.

_________ include material investing and financing transaction that didn’t have an effect on cash flows.

During the __________, a company is in the process of being established. The company has negative net operating cash flows and negative investing cash flows.

The ________ indicates the evolution of the company. It has positive operating cash flows.

At the _________, the company stabilizes. It has positive operating cash flows and is no longer expanding.

In the _________ (last phase), the company falls out. It has negative operating and financing cash flows, but positive investing cash flows.

_________ means sales are occurring more during specific points of the years. It is one cause of deviation.

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.

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.

_________ measures to see if current assets exceed current liabilities. If current assets grow, operating cash flows are reduced.