When preparing the statement of cash flows by the indirect method, it is necessary to adjust for non-cash expenses such as depreciation expense.
True, When preparing the statement of cash flows by the indirect method, it is necessary to adjust for non-cash expenses such as depreciation expense. |
Non-cash expenses do not involve any actual cash flow, so they are added back to net income. |
Cash flow statement is used to analyze changes in cash flows, so any non cash flows items are adjusted. |
Examples of non-cash expenses include depreciation, amortization, bad debts expense, loss on sale of fixed assets. |
All these non cash expenses are adjusted for and added back to net income in the statement of cash flows. |
When preparing the statement of cash flows by the indirect method, it is necessary to adjust...
Question 5 When preparing the statement of cash flows under the indirect method, an appropriate procedure would be to subtract an increase in accounts receivable. subtract an increase in wages payable. subtract amortization expense. determine cash paid to suppliers. add a gain from the sale of a fixed asset. 1 points Question 6 Which of the following statements is incorrect, regarding the effect of depreciation on a statement of cash flows using the indirect method? Depreciation expense is not an...
In preparing a company's statement of cash flows using the indirect method, the following information is available: Net income Accounts payable increased by Accounts receivable decreased by Inventories increased by Depreciation expense $52,000 18,000 25,000 5,000 30,000 Net cash provided by operating activities was:
In preparing a company's statement of cash flows using the indirect method, the following information is available: Net income$72,000Accounts payable increased by38,000Accounts receivable decreased by65,000Inventories decreased by25,000Cash dividends paid34,000Depreciation expense60,000Net cash provided by operating activities was: Multiple Choice $260,000 $111,000
In preparing a company's statement of cash flows using the indirect method, the following information is availiable: Net income Accounts payable decreased by Accounts receivable increased by Inventories increased by Depreciation expense $82,000 33,000 40,000 20,000 60,000 Net cash provided by operating activities was: Multiple Choice ο $115,000. ο $155,000. ο $49,000. ο $75,000. ο $82,000.
Under the indirect method of preparing the statement of cash flows, depreciation and amortization should be: Deducted from net income Added to net income Neither added to or deducted from net income
When preparing the operating section of the statement of cash flows using the direct method, which of the following statements is true? a. A decrease in accounts payable is subtracted from expenses. b. An increase in accounts receivable is subtracted from sales. c. Depreciation expense is added to cash flows. d. Gains on sales of long-term assets are subtracted from cash flows.
P1-34A Preparing the statement of cash flows-indirect method with non-cash transactions The 2016 income statement and comparative balance sheet of McKnight, Inc. follow: MCKNIGHT, INC. Income Statement Year Ended December 31, 2016 $ 441,000 Sales Revenue 202,200 Cost of Goods Sold 238,800 Gross Profit Operating Expenses: $ 76,400 Salaries Expense 14,200 Depreciation Expense-Plant Assets 10,500 Other Operating Expenses 101,100 Total Operating Expenses 137,700 Operating Income Other Revenues and (Expenses): 8,800 Interest Revenue (21,600) Interest Expense (12,800) Total Other Revenues and...
19. When preparing a statement of cash preparing a statement of cash loan (indirect methodl, which of the following is Hot an adjustm adjustment to reconcile net income to be cash vided by operating activities A) A change in income taxes payable B) A change in interest payable C) A change in dividends payable D) All of these are adjustments 20. When using the indirect method to prepare the operating section of a statement of cash llows, which of the...
When using the T-account approach to preparing the indirect method of the statement of cash flows, which of the following would be associated with amounts entered on the credit side of the Cash T-account? a. Increase in Inventory b. Decrease in Accounts Receivable c. Decrease in Inventory d. Increase in Accrued Liabilities
In preparing a company's statement of cash flows for the most recent year using the indirect method, the following information is available:Net income for the year was $71,000Accounts payable increased by 37,000Accounts receivable decreased by 63,000Inventories decreased by 24,000Cash dividends paid were 33,000Depreciation expense was 58,000Net cash provided by operating activities was:Multiple Choice$109,000 $62,000 $253,000 $205,000$108,000