Aacsb reflective thinking aicpa fn measurement blooms

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AACSB: Reflective Thinking AICPA FN: Measurement Blooms: Understand Difficulty: 3 Hard Learning Objective: 21-02 Define cash equivalents. Spiceland - Chapter 21 #146 Topic: Cash and cash equivalents
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147. Is depreciation a source of cash? Explain. No. Depreciation is simply the systematic and rational allocation of an asset's cost. The expenditure to acquire the item being depreciated was a use of cash. When the indirect method is used to determine cash flows from operating activities, depreciation is added back to net income in the statement of cash flows because it was deducted on the accrual basis income statement but it did not require the use of cash. AACSB: Reflective Thinking AICPA FN: Measurement Blooms: Understand Difficulty: 1 Easy Learning Objective: 21-04 Determine cash flows from operating activities by the indirect method. Spiceland - Chapter 21 #147 Topic: Cash flows from operating activities-indirect method In its 2013 Annual Report to Shareholders, Sisters Corporation included the following information on cash flows from operations: Spiceland - Chapter 21
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148. Explain why Sisters Corporation subtracts equity income from its net income in its measurement of cash flows. Under the equity method, income accrues to the investor company when it is earned by the investee company, not when dividends are distributed. In effect, Sisters Corporation has earned investment revenue that has been included in its income statement. However, this amount does not involve cash until Sisters Corporation receives dividends (that will be reported as investment inflows). Therefore, Sisters Corporation makes an adjustment to eliminate this noncash equity income from the company's operating cash flows. AACSB: Reflective Thinking AICPA FN: Measurement Blooms: Understand Difficulty: 3 Hard Learning Objective: 21-04 Determine cash flows from operating activities by the indirect method. Spiceland - Chapter 21 #148 Topic: Cash flows from operating activities-indirect method 149. Did accounts receivable increase or decrease during 2013? The accounts receivable balance decreased during 2013. This is apparent because adjustments for current assets are inversely related to the direction of the change in balance. Because the adjustment for accounts receivable was positive, its balance must have decreased. AACSB: Analytic AICPA FN: Measurement Blooms: Analyze Difficulty: 2 Medium Learning Objective: 21-04 Determine cash flows from operating activities by the indirect method. Spiceland - Chapter 21 #149
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Topic: Cash flows from operating activities-indirect method 150. What activities are included in the statement of cash flows under the section titled "Cash flows from investing activities"? Cash flows from investing activities include the sale or purchase of property, plant, and equipment; the sale or purchase of investment securities; and the collection or making of loans to others.
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