UCBUGBA102ATopic09PracticeQuestionsSolns

UCBUGBA102ATopic09PracticeQuestionsSolns - Topic09...

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Topic09 Statement of Cash Flows Question 1. In a short sentence, define the following terms: a. Net Increase (Decrease) in Cash & Cash Equivalents is the change in the balance of cash and cash equivalents from one year to the next. It is reported on the Statement of Cash Flows and reconciled to the Cash b. Cash Flows from Operating Activities (also referred to as Cash Flow from Operations) are the cash inflows and cash outflows related to the earnings activities associated with day-to-day operations. c. Cash Flows from Investing Activities are the cash inflows and cash outflows related the acquisition and sale of long-term assets including property, plant and equipment plus investments in other companies. d. Cash Flows from Financing Activities are the cash inflows and cash outflows related to the receipts and disbursements of long-term sources of financing including debt sources as well as equity sources. Question 2. In a short sentence, explain the difference between the following concepts: These are alternative methods for preparing the Operating Activities section of the Cash Flow Statement. The direct method converts revenues and expenses into cash inflows and cash outflows and reports these directly, whereas the indirect method reports Net Income and shows adjustments to reconcile it to Net Cash Flow from Operations.
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This note was uploaded on 03/05/2009 for the course UGBA 102A taught by Professor Udpa during the Fall '07 term at University of California, Berkeley.

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UCBUGBA102ATopic09PracticeQuestionsSolns - Topic09...

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