benefit of the entity.11-5The three types of activities that are summarized in the statement of cash flows are the Operating Activities, the investing activities and the financing activities.11-12You can use the indirect method to focus on cash, because the indirect method in a statement of cash flows, the method that adjusts net income to reflect only cash receipts and outlays. 11-16Depreciation can be the most crucial aspect of a statement of cash flows if prepared by the indirect method. Because accountants view depreciation as an allocation of historical cost to expense. Therefore depreciation expense does not entail a current outflow of cash.19-1No I do not agree because the operating cycle is the time span during which cash is spent to acquire goods and services that are sued to produce the organization’s output, which in turn is sold to customers, who in turn pay for their purchases with cash.19-4Items most commonly classified as current assets, are Accounts receivable’s, inventories, basically current assets are cash and all other assets that are reasonably expected to be converted to cash or sold or consumed during the normal operating cycle.19-14A Subordinated debenture is a creditor claim that is junior to the other creditors in exercising claims against assets....
