111. In preparing the statement of cash flows by the indirect method, increases in noncash current assets are subtracted from net income.
112. In preparing the operating activities section of the statement of cash flows by the indirect method, decreases in current liabilities are added to net income.
113. In preparing the operating activities section of the statement of cash flows by the indirect method, noncash revenues and gains are added to net income.
114. For many companies, cash flow from operating activities exceeds income from operations, due to the effect of depreciation, which decreases income from operations but does not decrease cash.
115. Rapid growth of a company can cause it to be short of cash.
116. FASB requires that companies report cash flow per share in their audited financial statements.
117. Cash flow from operating activities is often less stable from year to year than is the amount of net income reported on the income statement.
118. The investing activities section of the statement of cash flows distinguishes between acquisitions of long-term assets that expand operating capacity and those that replace old, worn-out assets.
119. The direct method of preparing the operating activities section of the statement of cash flows shows increases and decreases in noncash current assets and current liabilities to arrive at cash flows from operating activities.
120. When the direct method is used to prepare the operating activities section of the statement of cash flows, cash inflows from customers and cash outflows for depreciation are among the categories of cash flows likely to be reported.
121. The amount of increase in accounts receivable is added to credit sales to calculate the amount of cash inflow from customers when using the direct method to prepare the operating activities section of the statement of cash flows.