TRUE-FALSE 12) Operating, Financing and Investing is the typical order of the se

Question

TRUE-FALSE

12) Operating, Financing and Investing is the typical order of the sections on a statement of cash flows.

13) The operating activities section of the statement of cash flows includes activities that create revenue or expenses for the entity’s business.

14) The financing activities section of the statement of cash flows includes paying dividends and making payments on long-term liabilities.

15) Most public companies use the indirect method to prepare their statement of cash flows.

1) The income from continuing operations helps investors make predictions about the company's past performance.

2) Gains and losses on the sale of plant assets are also reported as discontinued operations.

3) Extraordinary items are unusual and infrequent in nature.

ANSWER

19) Kevin Company sold equipment for $7990 cash. The book value of the asset was $4770. How should this transaction be reported on the Statement of Cash Flows?

Explanation / Answer

12) True

13) True

14) True

15) True

16) False

17) False

18) True

19) Cash recd of $7990 as Inflow under Investing Activity & Loss of $3220 to be added back to Income under Operating Activity

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