Questions from Managerial Accounting

Q: Describe the difference between the direct and the indirect methods of preparing

Describe the difference between the direct and the indirect methods of preparing the operating section of the statement of cash flows.

Q: Describe the process for reconciling net income to the cash basis.

Describe the process for reconciling net income to the cash basis. What items are added to net income? What items are subtracted from net income?

Q: Summarize the process for preparing the operating section of the statement of

Summarize the process for preparing the operating section of the statement of cash flows when using the direct method.

Q: Provide an example of an operating cash inflow that could result from

Provide an example of an operating cash inflow that could result from sustainability activities. Also provide an example of an operating cash outflow that would support sustainability.

Q: Now that you have crunched the numbers, interpret the ratios.

Now that you have crunched the numbers, interpret the ratios. What can you tell about each company and its financial position? Is one company clearly better than the others in terms of its financial p...

Q: Calculate two ratios that measure the ability to pay current liabilities.

Calculate two ratios that measure the ability to pay current liabilities.

Q: Calculate at least two ratios that measure the ability to sell inventory

Calculate at least two ratios that measure the ability to sell inventory and collect receivables.

Q: Calculate at least two ratios that measure the ability to pay long

Calculate at least two ratios that measure the ability to pay long-term debt.

Q: Contrast lag indicators with lead indicators. Provide an example of each

Contrast lag indicators with lead indicators. Provide an example of each type of indicator.

Q: Compare direct costs to indirect costs. Give an example of a

Compare direct costs to indirect costs. Give an example of a cost at a company that could be a direct cost at one level of the organization but would be considered an indirect cost at a different lev...