Questions from Financial Accounting

Q: Explain how we report depreciation expense in the statement of cash flows

Explain how we report depreciation expense in the statement of cash flows using the indirect method. Why do we report it this way?

Q: Describe how we report a gain or loss on the sale of

Describe how we report a gain or loss on the sale of an asset in the statement of cash flows using the indirect method. Why do we report it this way?

Q: Indicate whether each of the following items would be added or subtracted

Indicate whether each of the following items would be added or subtracted from net income in preparing the statement of cash flows using the indirect method: (a) an increase in current assets, (b) a...

Q: How does an increase in accounts receivable affect net income in relation

How does an increase in accounts receivable affect net income in relation to operating cash flows? Why? How does a decrease in accounts receivable affect net income in relation to operating cash flows...

Q: Using the amounts below, calculate the inventory turnover ratio, average

Using the amounts below, calculate the inventory turnover ratio, average days in inventory, and gross profit ratio.

Q: A $10,000 investment on the books of a company

A $10,000 investment on the books of a company is sold for $9,000. Under the indirect method, how does this transaction affect operating, investing, and financing activities?

Q: Provide three examples of financing activities reported in the statement of cash

Provide three examples of financing activities reported in the statement of cash flows.

Q: Bell Corporation purchases land by issuing its own common stock to the

Bell Corporation purchases land by issuing its own common stock to the seller. No cash is exchanged. How do we report this transaction in the statement of cash flows, if at all?

Q: Explain the difference between the calculation of return on assets and cash

Explain the difference between the calculation of return on assets and cash return on assets. How can cash-based ratios supplement the analysis of ratios based on income statement and balance sheet in...

Q: Describe the two primary strategies firms use to increase cash return on

Describe the two primary strategies firms use to increase cash return on assets.