Question

True / False ____1 The Statement of Cash Flows is an optional disclosure for a set...

True / False

____1 The Statement of Cash Flows is an optional disclosure for a set of financial statements.

____2 The first step in preparing the Statement of Cash Flows is to determine the change in the long-term assets..

____3 A statement of cash flows prepared by the indirect method will disclose the cash flows from specific operating activities, such as cash received from customers.

____4 Convertible bonds provide for the conversion of the interest rate being paid into a higher or lower interest of the bond.

____5. The face value of a bond is the total amount of principal and interest to be paid to the bondholder over the life of the bond.

____6. A $50,000 bond that sold at 102 would involve a bond discount of $48,000.

____7. The net effect of issuing bonds at a discount is to increase the periodic interest expense over the life of the bonds through the amortization of the discount.

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Homework Answers

Answer #1

1. False since it is mandatory part of financial statements

2. False since first step begins with net income from the income statement and makes several adjustments related to changes in current assets, current liabilities, and other items to arrive at cash provided by operating activities

3. False since cash recived from customers is used in direct method

4 False

5 False

6 False

7 True

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