Explore BrainMass

Match Accounting Terms with Descriptions

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

Please see the attachment.

1. (8pts) Match as many of the descriptions as possible with one of the terms. If no match is possible, answer "7." Place the number to the right of the letter below.

a. Reports the major classes of operating cash receipts and payments of an entity during a period

b. Investing and financing activities which should not be disclosed because they do not involve cash

c. Investing and financing activities which should be disclosed, but not in the cash flow statement itself

d. Net income before the expense of interest and taxes

e. Include acquisition and disposition of property, plant, and equipment

f. Include acquisition of cash from shareholders and creditors

g. Include transactions relating to a company's delivering or producing its goods for sale and providing its services

h. Begins with net income and makes adjustments as needed to arrive at net cash from operations
1. direct method
2. financing activities
3. indirect method
4. investing activities
5. noncash investing and financing activities
6. operating activities
7. no match


2. (12 pts)Using the following symbols, indicate:

1. How each of the following activities should be classified on the statement of cash flows, and
2. Whether the transaction would result in an increase or a decrease in cash.

(1) (2)
Classification Effect on Cash

OP = Operating activity I = Increase
IN = Investing activity D = Decrease
FI = Financing activity

1 2
IN I EXAMPLE: Equipment was sold for $100,000.

_____ _____ 1. Cash dividends of $20,000 were paid.

_____ _____ 2. $40,000 was borrowed on a bank loan.

_____ _____ 3. A factory building was purchased for $800,000.

_____ _____ 4. Interest of $5,000 was paid.

_____ _____ 5. Capital stock was issued for $200,000.

_____ _____ 6. $15,000 was received from customers.

© BrainMass Inc. brainmass.com October 16, 2018, 9:41 pm ad1c9bdddf


Solution Preview

Please see the attached Excel spreadsheet with your answer.

Also, here is some background information for you on Cash Flow Statements for your future reference:

Complementing the balance sheet and income statement, the cash flow statement (CFS), a mandatory part of a company's financial reports since 1987, records the amounts of cash and cash equivalents entering and leaving a company. The CFS allows investors to understand how a company's operations are running, where its money is coming from, and how it is being spent. Here you will learn how the CFS is structured and how to use it as part of your analysis of a company.

The Structure of the CFS
The cash flow statement is distinct from the income statement and balance sheet because it does not include the amount of future incoming and outgoing cash that has been recorded on credit. Therefore, cash is not the same as net income, which, on the income statement and balance sheet, includes cash sales and sales made on credit.

Cash flow is determined by looking at three components by which cash enters and leaves a company: core operations, investing and ...

Similar Posting

Match the terms with the correct definitions

Match the term with the correct definition


A The plan of organization and all the related methods and measures adopted within a business to safeguard its assets and enhance the accuracy and reliability of its accounting records.
B Law that forces companies to pay more attention to internal control.
C Company employees who evaluate on a continuous basis the effectiveness of the company's system of internal control.
D An expense account to record credit losses.
E Management establishes a percentage relationship between the amount of receivables and expected losses from uncollectible accounts.
F A method of accounting for bad debts that involves expensing accounts at the time they are determined to be uncollectible.
G A form of interest-bearing note payable issued by corporations, universities, and governmental agencies.
H A contractual arrangement giving the lessee temporary use of the property with continued ownership of the property by the lessor. Accounted for as a rental.
I Bonds that permit bondholders to convert them into common stock at their option.
J The amount stockholders paid to the corporation in exchange for shares of ownership.
K Contractual provisions that give it preference or priority over common stock in certain areas.
L Net income that a company retains in the business.
M A technique for evaluating financial statement data that expresses each item in a financial statement as a percent of a base amount.
N A comparison of the market price of each share of common stock to the earnings per share, computed as the market price of the stock divided by earnings per share.
O Events and transactions that meet two conditions: They are unusual in nature and infrequent in occurrence.
P Securities held for resale.
Q Securities not classified as trading securities or held-to-maturity securities.
R Securities for which the reporting enterprise has both the positive intent and ability to hold those securities to maturity.
S A lease in which the lessee obtains some ownership rights over the asset involved in the transaction, resulting in the recording of the asset as company property on its general ledger.
T An arrangement whereby a firm leases its own equipment, such as IBM leasing its own computers, thereby competing with an independent leasing company.
U The average time required for the cash invested in inventories to be converted into the cash ultimately collected on sales made to customers.
V An overall financial and operating plan, including budgets for all aspects of business operations and for all responsibility centers.
W A budget that can readily be revised to reflect budgeted amounts given the actual levels of activity (sales and production) achieved during the period. Makes use of cost-volume-profit relationships to restate the master budget for the achieved level of activity.

Match Term

Extraordinary items
Direct Write-off Method
Convertible Bonds
Capital Lease
Bad Debts Expense
Flexible Budget
Internal auditors
Internal control B
Master Budget
Price-Earnings (P-E) Ratio
Preferred stock
Percentage of Receivables Basis
Paid-in capital
Operating Leases
Operating Cycle
Retained earnings
Sales-Type Lease
Sarbanes-Oxley Act of 2002 (SOX)
Securities available for sale:
Vertical Analysis
Trading Securities
Securities Held to Maturity

View Full Posting Details