Questions from Intermediate Accounting

Q: Why do many users prefer the direct method? Why do the

Why do many users prefer the direct method? Why do the majority of preparers prefer the indirect method?

Q: How is depreciation expense handled when the direct method is used?

How is depreciation expense handled when the direct method is used? The indirect method?

Q: Why does the FASB treat interest payments as an operating activity rather

Why does the FASB treat interest payments as an operating activity rather than as a financing activity?

Q: When using the direct method, what items must be considered in

When using the direct method, what items must be considered in the calculation of cash paid for inventory purchases?

Q: How is a loss on the sale of a long-term

How is a loss on the sale of a long-term asset treated when using the direct method? The indirect method?

Q: Use the following information to answer the questions below:

Use the following information to answer the questions below: Dividends declared and paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000 Cash from investin...

Q: What supplemental disclosures are required by the FASB if a company elects

What supplemental disclosures are required by the FASB if a company elects to use the direct method in preparing its statement of cash flows? What disclosures are required if the indirect method is us...

Q: How are significant noncash investing and financing transactions reported in connection with

How are significant noncash investing and financing transactions reported in connection with a statement of cash flows?

Q: What does it mean when the value of a company’s cash flow

What does it mean when the value of a company’s cash flow adequacy ratio is less than 1.0?

Q: A forecasted statement of cash flows allows management to plan ahead.

A forecasted statement of cash flows allows management to plan ahead. What information is contained in the statement that can be used for planning purposes?