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Exam 12: Reporting Cash Flows

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Question 141

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The full disclosure principle requires that noncash investing and financing activities be disclosed in the financial statements.

A) True
B) False

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Question 142

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Noncash financing and investing activities are disclosed in a ________ or in a separate ________.

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answers c...

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Question 143

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Information to prepare the statement of cash flows usually comes from (a)comparative balance sheets, (b)current income statement,and (c)additional information.

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise. $\begin{array} { | l | r | } \hline \text { Cost of goods sold } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & \$ 226,000 \\\hline \text { Merchandise inventory, January } 1 \ldots \ldots \ldots \ldots \ldots \ldots & 54,800 \\\hline \text { Merchandise inventory, December } 31 \ldots \ldots \ldots \ldots \ldots & 57,400 \\\hline \text { Accounts payable, January } 1 \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 54,400 \\\hline \text { Accounts payable, December } 31 \ldots \ldots \ldots \ldots \ldots \ldots & 59,800 \\\hline\end{array}$

The purchase of stock in another company is classified as an investing activity.