ACCOUNTING REVIEW

ACCOUNTING JEOPARDY

DOCSEDA

SCF Basic

Concepts

SCFClassifications

SCFAdjustments

SCF Indirect

SCFSCFDirectDirect

100 100 100 100 100

200 200 200 200 200

300 300 300 300 300

400 400 400 400 400

500 500 500 500 500

SCF Basic Concepts

100

Major aim of Statement of Cash Flow (SCF) is to explain change in this account.

A: What is Cash?

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SCF Basic Concepts200

A: What are Direct and Indirect Methods?

These are the two major methods of preparing a Statement of Cash Flow (SCF).

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SCF Basic Concepts300

A: What are Operating, Investing, and Financing Activities?

These are three major types of activities that are analyzed in a Statement of Cash Flow.

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SCF Basic Concepts 400

A: What is Net Income?

Major aim of Operating Activities Section of SCF is to convert this financial statement item from accrual to cash basis.

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SCF Basic Concepts500

A: What is Schedule of significant Non-cash investing and financing activities or transactions?

This section of Statement of Cash Flows has nothing to do with cash transactions.

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A: What is Investing Activity?

The cash purchase of equipment would be classified as this type of activity in a Statement of Cash Flow (SCF).

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SCF Classifications 100

SCF Classifications 200

A: What is Financing Activity?

The issuance of stock for cash would be classified as this type of activity in a Statement of Cash Flow (SCF).

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SCF Classifications 300

A: What is Financing Activity?

The payment of dividends would be classified as this type of activity in a Statement of Cash Flow (SCF).

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SCF Classifications 400

A: What is Operating Activity?

The sale of land by a Real Estate Company would be classified as this type of activity in a Statement of Cash Flow (SCF).

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SCF Classifications 500

A: What is a significant Non-cash Financing activity?

The conversion of debt to common stock would be classified as this type of activity in a Statement of Cash Flow (SCF).

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SCF Adjustments100

A: What is Addition to Net Income?

Under SCF Indirect method, Depreciation Expense is shown as this type of adjustment to net income in computation of net cash flow from operating activities.

 

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SCF Adjustments 200

A: What is Deduction to Net Income?

Under SCF Indirect method, an increase in Accounts Receivable is shown as this type of adjustment to net income in computation of net cash flow from operating activities.

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SCF Adjustments 300

A: What is Addition to Net Income?

Under SCF Indirect method, an increase in Accounts Payable is shown as this type of adjustment to net income in computation of net cash flow from operating activities.

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SCF Adjustments 400

A: What is Deduction to Net Income?

Under SCF Indirect method, a decrease in Income Tax Payable is shown as this type of adjustment to net income in computation of net cash flow from operating activities.

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SCF Adjustments 500

A: What is Addition to Net Income?

Under SCF Indirect method, Loss on Sale of Equipment is shown as this type of adjustment to net income in computation of net cash flow from operating activities.

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SCF Indirect100

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Based on information below, this amount represents net cash inflow (outflow) from financing activities to be shown on related SCF. Comparative Balance Sheet Income Statement

20x2 20x1 Diff. For Year ended 12/31/20x2Cash 14 3 11 Net Sales 450Accounts Receivable(net) 33 24 9 Cost of Goods Sold -228Merchandise Inventory 24 12 12 Gross Margin 222Prepaid Expenses 5 7 (2) Operating Exp.(Dep. Exp.of 12) -90Long term Investments 105 120 (15) Operating Income 132Land 180 180 0 Other Income (Expenses):Building (net) 174 180 (6) Interest Expense (54)Equipment (net) 150 60 90 Interest Income 6 Total Assets 685 586 99 Dividend Income 6

Gain on Disposal of Equip. 12Accounts Payable 16 19 (3) Loss on Sale of Investment (15) -45Accrued Liabilities 9 6 3 Income before Income Taxes 87Income Tax Payable 11 9 2 Income Tax Expense -30Bonds Payable 270 210 60 Net Income 57Total Liabilities 306 244 62 Additional Information:

Sold Investments (BV of 30) for 15Common Stock 246 246 0 Purchased Investments for 15Retained Earnings 133 96 37 Sold Equipment (BV of 30) for 42Total Stockholder's Equity 379 342 37 Purchased Equipment for 126Total Liabilities and Equity 685 586 99 Issued bonds for 60; Paid 20 in dividends;

A: What is $40 [60(Bonds)-20(Div)]?

SCF Indirect200

A: What is ($84) [15(Inv)+42(Equip)-126(Equip)-15(Inv)]?

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Based on information below, this amount represents net cash inflow (outflow) from investing activities to be shown on related SCF. Comparative Balance Sheet Income Statement

20x2 20x1 Diff. For Year ended 12/31/20x2Cash 14 3 11 Net Sales 450Accounts Receivable(net) 33 24 9 Cost of Goods Sold -228Merchandise Inventory 24 12 12 Gross Margin 222Prepaid Expenses 5 7 (2) Operating Exp.(Dep. Exp.of 12) -90Long term Investments 105 120 (15) Operating Income 132Land 180 180 0 Other Income (Expenses):Building (net) 174 180 (6) Interest Expense (54)Equipment (net) 150 60 90 Interest Income 6 Total Assets 685 586 99 Dividend Income 6

Gain on Disposal of Equip. 12Accounts Payable 16 19 (3) Loss on Sale of Investment (15) -45Accrued Liabilities 9 6 3 Income before Income Taxes 87Income Tax Payable 11 9 2 Income Tax Expense -30Bonds Payable 270 210 60 Net Income 57Total Liabilities 306 244 62 Additional Information:

Sold Investments (BV of 30) for 15Common Stock 246 246 0 Purchased Investments for 15Retained Earnings 133 96 37 Sold Equipment (BV of 30) for 42Total Stockholder's Equity 379 342 37 Purchased Equipment for 126Total Liabilities and Equity 685 586 99 Issued bonds for 60; Paid 20 in dividends;

SCF Indirect300

A: What is $15 [12(Dep)+15(Loss)-12(Gain)]?

Based on information below, this amount represents net adjustment to net income from Income Statement section only to be shown on related SCF.

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Comparative Balance Sheet Income Statement20x2 20x1 Diff. For Year ended 12/31/20x2

Cash 14 3 11 Net Sales 450Accounts Receivable(net) 33 24 9 Cost of Goods Sold -228Merchandise Inventory 24 12 12 Gross Margin 222Prepaid Expenses 5 7 (2) Operating Exp.(Dep. Exp.of 12) -90Long term Investments 105 120 (15) Operating Income 132Land 180 180 0 Other Income (Expenses):Building (net) 174 180 (6) Interest Expense (54)Equipment (net) 150 60 90 Interest Income 6 Total Assets 685 586 99 Dividend Income 6

Gain on Disposal of Equip. 12Accounts Payable 16 19 (3) Loss on Sale of Investment (15) -45Accrued Liabilities 9 6 3 Income before Income Taxes 87Income Tax Payable 11 9 2 Income Tax Expense -30Bonds Payable 270 210 60 Net Income 57Total Liabilities 306 244 62 Additional Information:

Sold Investments (BV of 30) for 15Common Stock 246 246 0 Purchased Investments for 15Retained Earnings 133 96 37 Sold Equipment (BV of 30) for 42Total Stockholder's Equity 379 342 37 Purchased Equipment for 126Total Liabilities and Equity 685 586 99 Issued bonds for 60; Paid 20 in dividends;

SCF Indirect400

A:What is ($17)[-9(AR)-12(Inv)+2(PP)-3(AP)+3(Liab) +2(ITP)]?

Based on info below, this amount represents net adjustment to net income from Current Asset & Current Liability section to be shown on related SCF.

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Comparative Balance Sheet Income Statement20x2 20x1 Diff. For Year ended 12/31/20x2

Cash 14 3 11 Net Sales 450Accounts Receivable(net) 33 24 9 Cost of Goods Sold -228Merchandise Inventory 24 12 12 Gross Margin 222Prepaid Expenses 5 7 (2) Operating Exp.(Dep. Exp.of 12) -90Long term Investments 105 120 (15) Operating Income 132Land 180 180 0 Other Income (Expenses):Building (net) 174 180 (6) Interest Expense (54)Equipment (net) 150 60 90 Interest Income 6 Total Assets 685 586 99 Dividend Income 6

Gain on Disposal of Equip. 12Accounts Payable 16 19 (3) Loss on Sale of Investment (15) -45Accrued Liabilities 9 6 3 Income before Income Taxes 87Income Tax Payable 11 9 2 Income Tax Expense -30Bonds Payable 270 210 60 Net Income 57Total Liabilities 306 244 62 Additional Information:

Sold Investments (BV of 30) for 15Common Stock 246 246 0 Purchased Investments for 15Retained Earnings 133 96 37 Sold Equipment (BV of 30) for 42Total Stockholder's Equity 379 342 37 Purchased Equipment for 126Total Liabilities and Equity 685 586 99 Issued bonds for 60; Paid 20 in dividends;

SCF Indirect500

A: What is $55 [57+12(Dep)-12(Gain)+15(Loss)-9(AR)-12 (Inv)+2(PP)-3(AP)+3(Liab)-2(ITP)]?

Based on information below, this amount represents net cash inflow

(outflow) from operating activities to be shown on related SCF.

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Comparative Balance Sheet Income Statement20x2 20x1 Diff. For Year ended 12/31/20x2

Cash 14 3 11 Net Sales 450Accounts Receivable(net) 33 24 9 Cost of Goods Sold -228Merchandise Inventory 24 12 12 Gross Margin 222Prepaid Expenses 5 7 (2) Operating Exp.(Dep. Exp.of 12) -90Long term Investments 105 120 (15) Operating Income 132Land 180 180 0 Other Income (Expenses):Building (net) 174 180 (6) Interest Expense (54)Equipment (net) 150 60 90 Interest Income 6 Total Assets 685 586 99 Dividend Income 6

Gain on Disposal of Equip. 12Accounts Payable 16 19 (3) Loss on Sale of Investment (15) -45Accrued Liabilities 9 6 3 Income before Income Taxes 87Income Tax Payable 11 9 2 Income Tax Expense -30Bonds Payable 270 210 60 Net Income 57Total Liabilities 306 244 62 Additional Information:

Sold Investments (BV of 30) for 15Common Stock 246 246 0 Purchased Investments for 15Retained Earnings 133 96 37 Sold Equipment (BV of 30) for 42Total Stockholder's Equity 379 342 37 Purchased Equipment for 126Total Liabilities and Equity 685 586 99 Issued bonds for 60; Paid 20 in dividends;

SCF Direct 100

A: What is $441 [450-9(AR)]?

Based on information below, this amount represents cash receipts from sales to be shown on related SCF.

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Comparative Balance Sheet Income Statement20x2 20x1 Diff. For Year ended 12/31/20x2

Cash 14 3 11 Net Sales 450Accounts Receivable(net) 33 24 9 Cost of Goods Sold -228Merchandise Inventory 24 12 12 Gross Margin 222Prepaid Expenses 5 7 (2) Operating Exp.(Dep. Exp.of 12) -90Long term Investments 105 120 (15) Operating Income 132Land 180 180 0 Other Income (Expenses):Building (net) 174 180 (6) Interest Expense (54)Equipment (net) 150 60 90 Interest Income 6 Total Assets 685 586 99 Dividend Income 6

Gain on Disposal of Equip. 12Accounts Payable 16 19 (3) Loss on Sale of Investment (15) -45Accrued Liabilities 9 6 3 Income before Income Taxes 87Income Tax Payable 11 9 2 Income Tax Expense -30Bonds Payable 270 210 60 Net Income 57Total Liabilities 306 244 62 Additional Information:

Sold Investments (BV of 30) for 15Common Stock 246 246 0 Purchased Investments for 15Retained Earnings 133 96 37 Sold Equipment (BV of 30) for 42Total Stockholder's Equity 379 342 37 Purchased Equipment for 126Total Liabilities and Equity 685 586 99 Issued bonds for 60; Paid 20 in dividends;

SCF Direct

200

A: What is $12 [6(Int)+6(Div)]?

Based on information below, this amount represents cash receipts from interest and dividend income to be shown on related SCF.

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Comparative Balance Sheet Income Statement20x2 20x1 Diff. For Year ended 12/31/20x2

Cash 14 3 11 Net Sales 450Accounts Receivable(net) 33 24 9 Cost of Goods Sold -228Merchandise Inventory 24 12 12 Gross Margin 222Prepaid Expenses 5 7 (2) Operating Exp.(Dep. Exp.of 12) -90Long term Investments 105 120 (15) Operating Income 132Land 180 180 0 Other Income (Expenses):Building (net) 174 180 (6) Interest Expense (54)Equipment (net) 150 60 90 Interest Income 6 Total Assets 685 586 99 Dividend Income 6

Gain on Disposal of Equip. 12Accounts Payable 16 19 (3) Loss on Sale of Investment (15) -45Accrued Liabilities 9 6 3 Income before Income Taxes 87Income Tax Payable 11 9 2 Income Tax Expense -30Bonds Payable 270 210 60 Net Income 57Total Liabilities 306 244 62 Additional Information:

Sold Investments (BV of 30) for 15Common Stock 246 246 0 Purchased Investments for 15Retained Earnings 133 96 37 Sold Equipment (BV of 30) for 42Total Stockholder's Equity 379 342 37 Purchased Equipment for 126Total Liabilities and Equity 685 586 99 Issued bonds for 60; Paid 20 in dividends;

SCF Direct300

A: What is $128 [90-12(Dep)-3(Liab)-2(PP)] ?

Based on information below, this amount represents cash payments for

operating expenses and other interest expense to be shown on related SCF.

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Comparative Balance Sheet Income Statement20x2 20x1 Diff. For Year ended 12/31/20x2

Cash 14 3 11 Net Sales 450Accounts Receivable(net) 33 24 9 Cost of Goods Sold -228Merchandise Inventory 24 12 12 Gross Margin 222Prepaid Expenses 5 7 (2) Operating Exp.(Dep. Exp.of 12) -90Long term Investments 105 120 (15) Operating Income 132Land 180 180 0 Other Income (Expenses):Building (net) 174 180 (6) Interest Expense (54)Equipment (net) 150 60 90 Interest Income 6 Total Assets 685 586 99 Dividend Income 6

Gain on Disposal of Equip. 12Accounts Payable 16 19 (3) Loss on Sale of Investment (15) -45Accrued Liabilities 9 6 3 Income before Income Taxes 87Income Tax Payable 11 9 2 Income Tax Expense -30Bonds Payable 270 210 60 Net Income 57Total Liabilities 306 244 62 Additional Information:

Sold Investments (BV of 30) for 15Common Stock 246 246 0 Purchased Investments for 15Retained Earnings 133 96 37 Sold Equipment (BV of 30) for 42Total Stockholder's Equity 379 342 37 Purchased Equipment for 126Total Liabilities and Equity 685 586 99 Issued bonds for 60; Paid 20 in dividends;

SCF Direct

400

A: What is $28 [30-2(ITP)]?

Based on information below, this amount represents cash payments for

income taxes to be shown on related SCF.

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Comparative Balance Sheet Income Statement20x2 20x1 Diff. For Year ended 12/31/20x2

Cash 14 3 11 Net Sales 450Accounts Receivable(net) 33 24 9 Cost of Goods Sold -228Merchandise Inventory 24 12 12 Gross Margin 222Prepaid Expenses 5 7 (2) Operating Exp.(Dep. Exp.of 12) -90Long term Investments 105 120 (15) Operating Income 132Land 180 180 0 Other Income (Expenses):Building (net) 174 180 (6) Interest Expense (54)Equipment (net) 150 60 90 Interest Income 6 Total Assets 685 586 99 Dividend Income 6

Gain on Disposal of Equip. 12Accounts Payable 16 19 (3) Loss on Sale of Investment (15) -45Accrued Liabilities 9 6 3 Income before Income Taxes 87Income Tax Payable 11 9 2 Income Tax Expense -30Bonds Payable 270 210 60 Net Income 57Total Liabilities 306 244 62 Additional Information:

Sold Investments (BV of 30) for 15Common Stock 246 246 0 Purchased Investments for 15Retained Earnings 133 96 37 Sold Equipment (BV of 30) for 42Total Stockholder's Equity 379 342 37 Purchased Equipment for 126Total Liabilities and Equity 685 586 99 Issued bonds for 60; Paid 20 in dividends;

SCF Direct 500

A: What is $243 [ 228+12(Inv)+3(AP)]?

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Based on information below, this amount represents cash payments for inventory

purchases to be shown on related SCF. Comparative Balance Sheet Income Statement

20x2 20x1 Diff. For Year ended 12/31/20x2Cash 14 3 11 Net Sales 450Accounts Receivable(net) 33 24 9 Cost of Goods Sold -228Merchandise Inventory 24 12 12 Gross Margin 222Prepaid Expenses 5 7 (2) Operating Exp.(Dep. Exp.of 12) -90Long term Investments 105 120 (15) Operating Income 132Land 180 180 0 Other Income (Expenses):Building (net) 174 180 (6) Interest Expense (54)Equipment (net) 150 60 90 Interest Income 6 Total Assets 685 586 99 Dividend Income 6

Gain on Disposal of Equip. 12Accounts Payable 16 19 (3) Loss on Sale of Investment (15) -45Accrued Liabilities 9 6 3 Income before Income Taxes 87Income Tax Payable 11 9 2 Income Tax Expense -30Bonds Payable 270 210 60 Net Income 57Total Liabilities 306 244 62 Additional Information:

Sold Investments (BV of 30) for 15Common Stock 246 246 0 Purchased Investments for 15Retained Earnings 133 96 37 Sold Equipment (BV of 30) for 42Total Stockholder's Equity 379 342 37 Purchased Equipment for 126Total Liabilities and Equity 685 586 99 Issued bonds for 60; Paid 20 in dividends;