Correct answer: Option (d) Issuance of long-term debt. This transaction results in a financing cash inflow and is reported under the cash flow statement.
What represents an inflow of cash?
What is cash inflow? Cash inflow is the money going into a business. That could be from sales, investments or financing. It’s the opposite of cash outflow, which is the money leaving the business.
Which of the following is an inflow of cash?
Answer ‘C’ (the sale of the firm’s bonds) would be considered an inflow of cash, since upon the sale, cash would be received.
What is cash flow per share?
Cash flow per share is the after-tax earnings plus depreciation on a per-share basis that functions as a measure of a firm’s financial strength. Many financial analysts place more emphasis on cash flow per share than on earnings per share (EPS).
Which of the following does not represent an outflow of cash and therefore would not be reported?
The correct option is (c) Discarding an asset that had not yet been fully depreciated. As discarding an asset that had been fully depreciated, would not result in any impact on the cash and cash equivalent of the business. This cannot be considered as a cash outflow and would not be reported in the cash flow statement.
What are the tools of financial statements?
Tools or Techniques of Financial Statement Analysis
- Comparative Statement or Comparative Financial and Operating Statements.
- Common Size Statements.
- Trend Ratios or Trend Analysis.
- Average Analysis.
- Statement of Changes in Working Capital.
- Fund Flow Analysis.
- Cash Flow Analysis.
- Ratio Analysis.
Where is cash flow per share reported on a statement of cash flows?
A cash flow per share amount should be reported on the statement of cash flows. When using the worksheet method to analyzing noncash accounts , no order of analysis is required, but it is more efficient to start with Retained Earnings and proceed upward in the account listing.
Where does cash paid to acquire treasury stock go on the statement of cash flows?
Cash paid to acquire treasury stock should be shown on the statement of cash flows from investing activities. Repayments of bonds would be shown as a cash outflow in the investing section of the statement of cash flows.
How is gain on sale of land reported in statement of cash flows?
There is no difference in the Investing and Financing sections of the statement of cash flows using the indirect and direct method. Under the direct method of preparing a Statement of Cash Flows, the gain on the sale of land is not adjusted or reported as part of cash flows from operating activities.
Where to find cash flows from operating activities?
On the statement of cash flows, the cash flows from operating activities section would include Nice work! You just studied 31 terms! Now up your study game with Learn mode.
