Chapter 13

Question 1

What does the statement of cash flows do?

Answer 1

• Explains variance in cash

Question 2

What is the 3 step process to complete the operating activities section?

Answer 2

1. start with net profit/ income
   2.
   a) add back non cash expenses such as depreciation and losses
   b) subtract non cash gains
   c) add decreases in current asset accounts and subtract increases in current asset accounts
   d) add increases in current liability accounts and subtract decreases in current liability accounts
2. Total numbers to determine Net cash provided (used) by Operating Activities

Question 3

What goes under investing activities?

Answer 3

Cash spent on non-current assets

Cash received from sale of non current assets.

Question 4

What goes under financing activities?

Answer 4

non - current liability

equity accounts