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20 Exakte Antworten 0 Text Antworten 0 Multiple Choice Antworten
Fenster schliessen
  1. The free cash flow statement is prepared based on the firm’s GAAP statement of cash flows. This is the suggested approach to use because:
  1. balance sheets prepared under GAAP require the use of accrual accounting
  2. it is time-consuming, although possible, to reproduce the cash flow statements found in most annual reports from the accompanying balance sheets
  3. it is simpler to rearrange the items from the GAAP cash flow statement than to re-create a cash flow statement from scratch
  4. published balance sheets generally provide much more detail than is necessary to create an accurate cash flows statement
c
Fenster schliessen
  1. When preparing a free cash flow statement, an item such as interest expense may require adjustment. Interest expense will:

a.   be adjusted by moving it from free cash flow to capital cash flow

b.   be adjusted by moving it from free cash flow to nonoperating cash flow

c.   not be adjusted as it is already a component of free cash flow

d.   be adjusted by netting it against interest income and showing the result as a component of free cash flow

a
Fenster schliessen
  1. When preparing a free cash flow statement, the income tax effect from an item such as interest expense must be considered. The income tax expense related to interest expense will:

a.   not be adjusted as income tax expense is considered an item of free cash flow

b.   will be shown as a capital cash flow adjustment

c.   will be shown as a nonoperating cash flow adjustment

d.   will be added to interest expense and the new total shown as a nonoperating cash flow adjustment

b
Fenster schliessen
  1. In converting the GAAP cash flow statement to a free cash flow statement, the analyst must:

a.   remove the free cash flow from any cash flows related to nonoperating assets

b.   remove the free cash flow between the firm and any capital claimants

c.   record any free cash flow equivalents

d.         All of the answers above are correct

d
Fenster schliessen
  1. The adjustments made to convert a GAAP cash flow statement to a free cash flow statement can be grouped into various categories. An adjustment made for the income tax effect of interest income the firm received can be placed in the category of:

a.   free cash flow equivalents

b.   interest expense and related amounts

c.   nonoperating cash flows

d.   employee stock options

c
Fenster schliessen
  1. Distributions from a joint venture:

a.   is a component of free cash flow on the free cash flow statement

b.   will be moved from free cash flow to capital cash flow

c.   will be moved from free cash flow to nonoperating cash flow

d.   will be excluded from the free cash flow statement as the distributions apply to an entity outside of the firm itself

c
Fenster schliessen
  1. The sale or maturity of an available-for-sale investment is shown on the free cash flow statement as a:

a.   free cash flow item

b.   nonoperating cash flow item

c.   capital cash flow item

d.   capital cash flow item, net of the income tax effect on the cash flow from the investment itself

b
Fenster schliessen
  1. Minority interest is the capital that a firm obtains from minority shareholders in consolidated subsidiaries. The change in the firm’s minority interest:

a.   is reclassified to the capital cash flow section because it relates to how the firm is financed, not to its core operations

b.   is reclassified to the nonoperating cash flow section because it relates to other investments of the firm, not to its core operations

c.   is not reclassified on the free cash flow statement

d.   is not shown on the free cash flow statement as it relates to activities outside of the firm itself

a