Question

Excercise 1-6,1-14

Securities and Exchange Commission International Accounting Standards Board Financial Accounting Standards Board American Institute of Certified Public Accountants l> 1. The federal agency with ultimate authority to determine rules used for preparing financial statements for companies whose stock is sold to the public 2. The group in the private sector with authority to set 3. The professional organization for certified public 4. The organization formed to develop worldwide accounting standards accountants accounting standards Exercise 1-14 Classification of Items on the Statement of Cash Flows Classify which it should appear: operating (O), investing (I), or financing (F) LOS e following items according to the section on the statement of cash flows in EXAN Section Item Example: Cash paid for insurance 1. Cash paid for land 2. Cash received from issuance of note 3. Cash paid for dividends 4. Cash received from issuance of capital stock 5. Cash collected from customers 6. Cash paid for income taxes MULTI-CONCEPT EXERCISES Exercise 1-15 Users of Accounting Information and the Financial Statements Following are a number of users of accounting information and examples of questions they need answered before making decisions. Fill in each blank to indicate whether the user is most likely to find the answer by looking at the income statement (IS), the balance sheet (BS), the statement of retained carnings (RE), or the statement of cash flows (SCF). LO4 Continuea)

Answer 1

There are three activities in cash flow statement

• Operating cash flow from business operations
• Investing cash flow from purchase or sale of investment or long term asset
• Financing cash flow from issue or redemption of capital

Total assets = Total liabilities + owner's equity

Closing balance of Owner's equity = Opening balance of equity + Net income - Dividend paid