The statement of cash flows explains how the cash balance readjusted throughout a specific duration of time.

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Only very liquid investments via original maturities of less than 6 months at the day of purchase qualify as cash equivalents.
FalseOnly very liquid investments via original maturities of 3 months or less at the day of purchase qualify as cash equivalents.
Many providers use the direct technique for discshedding their cash flows from operating activities fairly than the indirect approach.
The distinction in between the straight and indirect and approaches of cash flow statement preparation only affects the determination of cash flows from investing tasks.
FalseThe direct and instraight methods are choices with respect to determining operations cash flows from operating tasks.
Cash flows connected through property, plant, and equipment acquisition and displace are reported as cash flows from investing activities.
Cash flows associated with issuance and retirement of long-term debt and equity are reported as cash flows from investing tasks.
FalseCash flows linked via issuance and also retirement of permanent debt and also equity are reported as cash flows from financing tasks.
FalsePatent amortization is a noncash price and does not impact cash flow from investing activities.
Cash flows from financing activities encompass those cash flows via respect to issuing and retiring long- term debt and also equity.
Which of the adhering to transactions does not lead to either a cash incirculation or a cash outflow?(a) A company purchased some of its very own stock from a stockholder. (b) Amortization of a patent.(c) Payment of a cash dividfinish.(d) Sale of devices at book worth.
(b) Patent amortization is a noncash expense and also does not lead to either a cash inflow or outcirculation.
Which of the complying with transactions would certainly not produce a cash circulation from operating activities?(a) Collecting cash from a customer.(b) Paying cash to a supplier.(c) Paying cash to stockholders for dividends.(d) Paying cash for a energy bill.
Which of the complying with would certainly not be a cash flow from investing activities?(a) Purchase of long-term investments.(b) Sale of a patent.(c) Collection of primary on a long-term note receivable.(d) Collection of interemainder revenue on a irreversible note receivable.
Which of the following would not be a cash circulation from financing activities?(a) Issuance of widespread stock for cash.(b) Borrowing cash on a irreversible note payable.(c) Collection of a cash dividend.(d) Repayment of principal on a irreversible note payable.
Which of the adhering to would certainly not be thought about a cash equivalent?(a) A 30-day certificate of deposit.(b) A ten-year treasury note purchased over nine years ago, which matures in two months.(c) A three-month Treasury bill.(d) A ten-year Treasury note purchased two months before maturity.
A agency reported net earnings of $200,000 during 2016. The agency reported depreciation price of $35,000, patent amortization of $10,000 and a $5,000 loss on the sale of equipment. Using the instraight approach, how a lot is the company"s net cash circulation from operating activities?(a) $245,000. (b) $250,000. (c) $240,000. (d) $235,000.
(b)Cash circulation from operating tasks = $250,000. Net income. $ 200,000+ Depreciation expense. $ 35,000 + Patent amortization $10,000+ Loss on equipment sale $ 5,000Net cash offered by operating tasks = $250,000
Which of the complying with statements does not correctly explain an adjustment to net earnings when determining cash flows from operating tasks making use of the indirect method?(a) An boost in accounts receivable will certainly be subtracted from net income.(b) A loss on the sale of a depreciable asset will certainly be included to net earnings. (c) An increase in accrued liabilities will be subtracted from net earnings.(d) An increase in accounts payable will be included to net income.
(C) Under the instraight method, a boost in accrued liabilities will be added to net income bereason accrued prices were greater than the associated cash payments.
Which of the following statements does not appropriately define an adjustment to net income when determining cash flows from operating activities making use of the instraight method?(a) An increase in weras payable will be added to net earnings.(b) A obtain on the sale of a depreciable ascollection will be subtracted from net earnings. (c) An boost in prepaid prices will certainly be subtracted from net income.(d) An boost in revenue taxes payable will certainly be subtracted from net revenue.
(d)Under the indirect method, a boost in income taxes payable will certainly be included to net income becauseearnings taxes cost was greater than the associated cash payments.
Which of the adhering to transactions would not be reported within the investing area of the cash circulation statement?(a) The cash sale of land at a get.(b) The purchase of a structure for cash.(c) The purchase of a stock investment for cash.(d) The cash receipt of a dividfinish from a stock investment.
Which of the adhering to is reported as a cash circulation from investing activities?(a) Cash received from dividends earned.(b) Purchasing land in exadjust for widespread stock. (c) Selling a long-term investment at a loss for cash.(d) Cash received from interest earned.
(c) The investing cash flows section of the cash circulation statement contains cash flows from the sale ofinvestments.
Which of the adhering to transactions would be reported within the investing section of the cash circulation statement?(a) The cash sale of land at a loss.(b) The purchase of a building in exadjust for common stock. (c) The receipt of a stock dividend from a stock investment. (d) The cash receipt of a dividfinish from a stock investment.
(a) The investing section of the cash flow statement would encompass the cash sale of the land regardmuch less of whether the sale was at a gain or loss.
Canadian Beer reported devices sold for $222 million cash and also brand-new devices purchased $1,515 million cash. The equipment sold had a net book worth of $150 million. Cash circulation from investing activities would show:(a) An incirculation of $222 million and also outcirculation of $1,515 million.(b) An inflow of $222 million and outcirculation of $150 million.(c) Cash phelp for tools of $1,293 million.(d) A net outcirculation of $1,365 million.
(a) The cash outflow of $1,515 and also cash incirculation of $222 are reported separately for investing activities. The inflow is reported at the amount of proceeds got.
Roberts Company marketed equipment for $250,000, purchased a structure for $6,500,000, sold momentary investments for $280,000, repassist major on a note payable for $2,300,000 plus $230,000 of interemainder, and paid cash dividends of $20,000.What was the net cash circulation from investing activities?(a) $6,250,000 outflow. (b) $8,320,000 outflow. (c) $8,270,000 outcirculation.(d) $5,970,000 outflow.
(d)Net Investing cash outcirculation = $5,970,000. =Equip sale proceeds $ 250,000- Building Acquisition. $(6,500,000)+ Short-term investment sales $280,000Net cash supplied in investing activities = $5,970,000
Roberts Company kind of sold tools for $250,000, purchased a structure for $6,500,000, offered temporary investments for $280,000, repaid primary on a note payable for $2,300,000 plus $230,000 of interemainder, and passist cash dividends of $20,000.What was the net cash flow from financing activities?(a) $2,300,000 outcirculation. (b) $2,320,000 outflow. (c) $2,530,000 outcirculation.(d) $2,550,000 outcirculation.
(b)Net financing cash outcirculation $2,320,000 = Keep in mind payable primary payment <$ 2,300,000 outflow>+ Cash dividend payment <$ 20,000 outflow>
Which of the complying with is correct?(a) Repayments of primary and also interest reduce financing activities cash flows.(b)Acquisition of prevalent stock shares for treasury is a cash outcirculation associated to investing tasks.(c)If a agency borrows $450 million in permanent notes and repays $380 million of permanent notes, these items must both be disclosed individually and also not netted versus each other in the financing area of the cash flow statement.(d)Issuing common stock in exadjust for the purchase of a building creates both a financing activity and also investing task cash flow.
Which of the complying with would be a financing activities cash flow?(a) Common stock dividends obtained from an investment in one more firm.(b) Interest payments.(c) Acquisition of treasury stock.(d) Acquisition of a structure by signing a note payable.
A firm obtained some land (individually appelevated at $12,000) and also paid for it by issuing 1,000 shares of its prevalent stock (par $10 per share; no industry price was quoted). How have to this be reported on the statement of cash flows?(a) Report $12,000 as inflow and also outflow of cash.(b) Report $12,000 as an inflow of cash.(c) The transaction should not be reported on the statement of cash flows.(d) Report in a schedule of significant noncash investing and also financing activities.
(d) Monumental noncash investing and also financing activities are reported as a supplement to the statement ofcash flows.
Which of the complying with transactions is not reported in the statement of cash flows as a cash circulation from investing activities?(a) Selling a depreciable ascollection for cash at a loss.(b) Purchasing a patent making use of cash.(c) Purchasing land in exreadjust for common stock.(d) Purchasing shares of widespread stock of another firm using cash.
(c)Purchasing land also in exadjust for prevalent stock is a transaction that does not usage cash and would not be presented in the statement of cash flows. The transaction would certainly be disclosed separately as a significant noncash investing and also financing activity.
Which of the following is not reported as a cash circulation from investing activities?(a) Sale of a depreciable asset for cash.(b) Purchasing land in exreadjust for common stock.(c) Selling a permanent investment at a loss for cash. (d) Acquisition of a patent in exreadjust for cash.
(b) Purchasing land in exchange for issuing common stock does not involve a cash circulation and is therefore not reported within the investing cash flows area of the cash flow statement.
KAJ Incorporated purchased a maker costing $250,000 by paying $35,000 and signing a $215,000 note payable.How would this transaction be reported within the cash flow from investing tasks area of the cash circulation statement?(a) An outflow of $250,000.(b) An outcirculation of $215,000.(c) An outcirculation of $35,000.(d) It would certainly not be reported in the investing tasks section of the cash flow statement.
(c) The investing cash flows area of the cash flow statement would certainly incorporate the $35,000 cash payment.
KAJ Incorporated purchased a machine costing $250,000 by paying $35,000 and also signing a $215,000 note payable.How would certainly this transactivity be reported within the cash circulation from financing activities section of the cash circulation statement?(a) An inflow of $215,000.(b) An outcirculation of $215,000. (c) An outcirculation of $35,000.(d) It would certainly not be reported in the financing activities area.

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(d) The signing of the note payable did not involve a cash circulation. The financing would be reported in sepaprice disclocertain and not in the financing activities section of the cash circulation statement.
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