Exam (elaborations)
HBX – Accounting Questions and Answers
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HBX – Accounting Questions and Answers
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HBX – Accounting Questions andAnswers
indirect method operating activity?? statement of cash flows Correct Ans-add back
depreciation to net income, subtract gains, add losses, decrease by Accounts receivable new -
accounts receivable old, decrease by inventory new - inventory old
Tips:
An increase in operating current assets is subtracted from net income.
A decrease in operating current assets is added to net income.
An increase in operating current liabilities is added to net income.
A decrease in operating current liabilities is subtracted from net income.
investing section? statement of cash flows Correct Ans-cash flows relating to long-lived
assets, such as property, plant, and equipment, intangible assets, and financial investments. This
includes expenditures, or cash outflows, related to the purchase of long term assets and receipts,
or cash inflows, from the sale of long term assets
financing section? statement of cash flows Correct Ans-Included here are the cash flows
associated with raising and paying back money to investors and creditors. If a business takes out
a new loan or pays off an existing one, it would be reflected in this section. Also, if a business
receives contributions from owners it is shown in this section. Dividends paid also
Startup/Fast Growing - statement of cash flows Correct Ans-Operating - negative or low cash
flows
, Investing - negative
Financing - large fluctuation??
Profitable/Growing - statement of cash flows Correct Ans-Operating - positive
Investing - usually negative
Financing - positive or negative depending on rate of growth
Mature/Steady - statement of cash flows Correct Ans-Operating - positive
Investing - slightly negative
Financing - generally negative
Decline Stage - statement of cash flows Correct Ans-Operating - negative
Investing - positive
Financing - positive or negative
return on equity equals Correct Ans-profitability * efficiency * leverage
gross profit margin Correct Ans-gross profit / sales
gross profit = net income - cost of sales
profit margin Correct Ans-net incomes / sales
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