81) The indirect method of computing cash flows from operating activities begins with net income and reconciles net income to operating cash flows.
82) The main source of cash for a business must come from operating activities if it is to prosper in the future.
83) In a statement of cash flow report the operating section is the first one.
84) In a statement of cash flow report the operating section is the first, followed by financing and then investing.
85) Of the three types of business activities reported on a cash flow statement?investing, financing, and operating?financing activities are the most important when evaluating a business that is up and running.
86) The payment of principal and interest on a loan would be reported in the investing activities section of a cash flow statement.
87) Collections on a loan are reported as a financing activity on the cash flow statement.
88) A gain on sale of capital assets is added to net income when preparing the operating activities section of a cash flow statement under the indirect method.
89) Interest payments on debt are considered financing activities on a cash flow statement.
90) Non cash activities such as an exchange of shares for a piece of equipment need to be disclosed either on a separate schedule at the bottom of the statement of cash flows or in a note to the financial statements.