SELF-CHECK: STATEMENT OF CASH FLOWS

Place your answers on your notebook:

1. Classify the transactions given below according to the type of activities:
O
Operating
I
Investing
F
Financing
NC
Non-Cash Transaction
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.
m.
n.
o.
p.
q.
r.
s.
t.
u.
v.
w.
x.
y.
z.

Cash sale of goods or services

Payment for rent
Proceeds from issuance of Notes
Cash investment made by the owner
Investment made by the owner in form of equipment
Payment to suppliers
Payment for salaries
Collection of accounts receivable
Acquisition of short-term investments in stocks
Purchase of furniture
Payment for Notes issued to a bank
Withdrawal made by the owner
Payment for interest
Proceeds from sale of old equipment
Acquisition of equipment thru issuance of Note
Payment for Note issued to acquire equipment
Payment for taxes
Receipt of dividends on investments made
Receipt of interest on Notes Receivable
Advances made to suppliers
Remittance of withholding taxes to the BIR
Payment for insurance
Payment for utilities
Returned defective supplies purchased on account
Payment for Accounts Payable
Cash refund given to customers for goods returned

2. The company is using Indirect Method in preparing its Statement of Cash

Flows. Identify how each of the item given below will be treated to adjust Net
Income in order to determine the Cash Flows from Operating Activities. Use
plus sign (+) if the item will be added back to Net Income or negative sign (-) if it
should be deducted from Net Income.
a. Depreciation Expense +
b. Increase in Accounts Receivable c. Decrease in Accounts Payable d. Increase in Unearned Revenue +
e. Decrease in Supplies +
f. Increase in Merchandise Inventory +
g. Amortization of Patents +
h. Gain on Sale of Equipment i. Loss on Sale of Investments +
j. Increase in Prepaid Expenses -

ANSWER KEY: SELF CHECK

Classify the transactions given below according to the type of activities:
O
I
F
NC
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.
m.
n.
o.
p.
q.
r.
s.
t.
u.
v.
w.
x.
y.
z.

Operating
Investing
Financing
Non-Cash Transaction

Cash sale of goods or services

Payment for rent
O
Proceeds from issuance of Notes
Cash investment made by the owner
Investment made by the owner in form of equipment
Payment to suppliers
Payment for salaries
Collection of accounts receivable
Acquisition of short-term investments in stocks
Purchase of furniture
Payment for Notes issued to a bank
Withdrawal made by the owner
Payment for interest
Proceeds from sale of old equipment
Acquisition of equipment thru issuance of Note
Payment for Note issued to acquire equipment
Payment for taxes
Receipt of dividends on investments made
Receipt of interest on Notes Receivable
Advances made to suppliers
Remittance of withholding taxes to the BIR
Payment for insurance
Payment for utilities
Returned defective supplies purchased on account
Payment for Accounts Payable
O
Cash refund given to customers for goods returned

O
F
F
NC
O
O
O
I
I
F
F
O
I
NC
I
O
O
O
O
O
O
O
NC
O

6
1. The company is using Indirect Method in preparing its Statement of Cash
Flows. Identify how each of the item given below will be treated to adjust Net
Income in order to determine the Cash Flows from Operating Activities. Use
plus sign (+) if the item will be added back to Net Income or negative sign (-) if it
should be deducted from Net Income.
a. Depreciation Expense
b. Increase in Accounts Receivable
c. Decrease in Accounts Payable
d. Increase in Unearned Revenue
e. Decrease in Supplies
f. Increase in Merchandise Inventory

+
+

g. Amortization of Patents
h. Gain on Sale of Equipment
i.

Loss on Sale of Investments

j.

Increase in Prepaid Expenses