Allen Company Uses the Indirect Method to Prepare Its Statement

question 151

True/False

Allen Company uses the indirect method to prepare its statement of cash flows. Refer to the following portion of the comparative balance sheet: If the net income for the year was $58,000, the company must have declared $32,000 as dividends during the year.

Understand the concept of cash equivalents and their reporting.

Recognize the treatment of non-cash transactions and significant transactions not affecting cash.

Grasp the calculation and interpretation of cash flow ratios.

Appreciate the relevance of timing and amounts in cash flow analysis.