UGBA 102A Lecture Notes - Lecture 12: Accrual, Net Income, Income Statement

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Kousha Modanlou
UGBA 102A
November 16, 2018
Chapter 12 Homework: Page 633 Q 1,6; Page 633-634 MC 4,6; Page 636 E12-1; Page 646 P12-1
Page 633
Q1: The income statement is made on an accrual basis and reports revenues earned and expenses
incurred during a time period. The balance sheet reports the assets, liabilities, and equity of a
business during a particular time point. The statement of cash flows reports cash receipts and
cash payments of a business in terms of three business activities: operating, investing, and
financing.
Q6: Depreciation does not cause an inflow of cash because depreciation expense is added to net
income to adjust for the effects of a noncash expense that was deducted in determining net
income.
Page 633-634
MC4: C
MC6: B
Page 636
E12-1:
1. F Dividends paid
2. F Repayments of long-term debtO3
3. O Depreciation and amortization
4. F Proceeds from issuance of common stock to employees
5. O [Change in] Accounts payable and accrued expenses
6. NA Cash collections from customers
7. F Net repayments of notes payable to banks
8. O Net income
9. I Payments to acquire property and equipment
10. O Change in] Inventory
Page 646
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Document Summary

Chapter 12 homework: page 633 q 1,6; page 633-634 mc 4,6; page 636 e12-1; page 646 p12-1. Q1: the income statement is made on an accrual basis and reports revenues earned and expenses incurred during a time period. The balance sheet reports the assets, liabilities, and equity of a business during a particular time point. The statement of cash flows reports cash receipts and cash payments of a business in terms of three business activities: operating, investing, and financing. Q6: depreciation does not cause an inflow of cash because depreciation expense is added to net income to adjust for the effects of a noncash expense that was deducted in determining net income. Proceeds from issuance of common stock to employees. [change in] accounts payable and accrued expenses: f, f, o, f, o, na cash collections from customers, f, o, i, o. Adjustments to reconcile net income to net cash provided by operating activities.

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