Listed Below Are the Reporting Classifications for a Statement of Cash

question 114

Multiple Choice

Listed below are the reporting classifications for a statement of cash flows using the direct method for reporting operating cash flows. Match the reporting classifications with the transactions described below.
-Investing cash outflow

• A)Cash collection of a nontrade note receivable.
• B)Cash collected on accounts receivable.
• C)Issuance of a long-term note payable for cash.
• D)Cash purchase of securities issued by another corporation.
• E)Payment of a property dividend.

Identify costs involved in the acquisition of fixed assets.

Understand how changes in estimates affect depreciation calculation.

Discriminate between capital and revenue expenditures.

Understand the accounting treatment for disposal of plant assets.

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Definitions:

Diversified Portfolio

An investment portfolio composed of a variety of assets to reduce exposure to risk associated with any single asset or industry.

Capital Gains

The profit earned from the sale of assets or investments, such as stocks or real estate, measured by the difference between the sale price and the original purchase price.

Interest Rate Risk

The potential for investment losses due to changes in interest rates.

Zero-Coupon Bonds

Bonds that do not pay periodic interest and are issued at a significant discount to their face value, maturing at par value.