The reason why we need to make an adjustment for gains and losses on property when using the indirect method to prepare the operating portion of the SCF is because

A. They represent changes in non-cash working capital accounts

B. The gross sales price is already accounted for in the investing cash flows section

C. The gains and losses affect net income but dont involve cash flows

D. None of them

Which of the following is considered to be a nominal variable? (check all that apply)

A. the price level

B.the amount of output produced in a given period

C.exchange rates expressed in relative currency units

D.hourly wage measured in dollars

Which of the following situations requires a downward adjustment (subtracting) from Net Income when using the indirect method of preparing the operating portion of the SCF?

A. Some of your COGS was depreciation and amortized expenses

B. You have some of your payments to your suppliers remains in accounts payable

C. You made a gain on the sale of property

D. None of them

The indirect and direct method should yield identical (check all that apply)

A. Depreciation adjustments

B. Net income

C. Net operating cash flows

D. None of them

Which of the following situations can cause items on the balance sheet to change in a way that is not reflected in the three cash flow activities section of the SCF? (check all that apply)

A. acquisition / divestiture of a business entity

B. subsidiaries in other industries

C. foreign currency translation adjustments

D. large cash investing and financing activities

The reason why preparing the statement of cash flows is generally more complicated than it needs to be is due to the use of______ when preparing the income statement and ______.

A. accrual basis the indirect method

B. cash basis the direct method

C. accrual basis the direct method

D. cash basis the indirect method

Which of the following are false regarding the direct and indirect methods for producing the SCF? (check all that apply)

A. The direct method must always be completed in compliance with GAAP

B. The indirect method applies only to financing activities

C. The indirect and direct method for preparing the operating portion of the SCF may yield different new changes in operating cash flows when there are large changes in noncash working capital accounts

D. None of them are false

When using the indirect method to prepare the SCF, which of the following will generally result in having to adjust operating cash flows upward (relative to net income)?

(check all that apply)

A. Your revenues include accounts receivables

B. Your cost of goods sold (COGS) should include a depreciation expense, which you had not yet accounted for on your income statement, but will correct.

C. Your cost of goods sold (COGS) included a depreciation expense, which you had already accounted for in your income statement.

D. all of your transactions were made in cash

If Bob used the direct method to prepare the operating, investing, and financing sections of the statement of cash flows (SCF), then which of the following actions must Bob take to remain GAAP compliant with his financial document preparation before filing?

A. He must prepare the investing section of the SCF using the indirect method

B. He must prepare the operating section of the SCF using the indirect method

C. He must prepare the financing section of the SCF using the indirect method

D. None of the them - Bob is already GAAP compliant

Which of the following metrics are used for analytical purposes only, and is not required to be reported on either the income statement, balance sheet, or SCF? (check all that apply)

A. Total Liabilities

B. Pre-tax Income

C. Free Cash Flows

D. EBITDA