Accounting Chp 21

Front 1

In a hospital's financial report includes a balance sheet, a statement if operations, and a statement if changes in net assets, why should a statement of cash flows also be included?

Back 1

Certain important aspects of the operating, financing, and investing activities are not made clear in the operations and balance sheets

Front 2

Sate the equation for the statement of cash flows.

Back 2

CE + OA = L + E

Front 3

In the context of the statement of cash flows, list three major possible sources of cash inflows.

Back 3

Result from increase in liabilities or net assets, or a decrease in assets.

Examples: Borrowing money; Excess in revenue; Long term investments sold

Front 4

In the context of the statement of cash flows, list three major possible sources of cash outflows.

Back 4

Result from a decrease in liabilities or net assets, or an increase in assets

Examples: Payments to accounts payable; Repays on principle, Retiring a long-term debt

Front 5

Under the indirect method, depreciation expense is added to excess of revenues over expenses to obtain the net cash flow from operating activities. Is depreciation expense a source of cash inflows?

Back 5

Depreciation expense is added back to excess of revenues over expenses because it is a non-cash expense. Does not require cash

Front 6

What is the purpose of a statement of cash flows?

Back 6

Summary of all significant cash flows.

Front 7

Explain what is meant by the following
(a) Operating activities
(b) Investing activities
(c) Financing activities

Back 7

(a) Directly of indirectly related to servicing patients
(b) Hospital purchases and sells investments and plant assets
(c) Transactions that involve short-term and long-term borrowings

Front 8

Distinguish between the direct and indirect methods of reporting cash flows from operating activities. Which do you prefer?

Back 8

Direct : Receipts and disbursements are reported under major classes of revenues and expenses

Indirect: Reconciliation is moved up into the body of the statement

Front 9

A hospital acquired an item of equipment in exchange for a long-term note payable. How should this transaction be reported in the statement of cash flows?

Back 9

Results in an increase in non-cash asset and an increase in a liability

Front 10

Do all expenses in the income statement represent cash outflows in the current period? Do all revenues in the income statement represent cash inflows in the current period?

Back 10

May arise from revenues and expenses recognized in prior, current, or future periods