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Q14-11RQ

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Horngren'S Financial And Managerial Accounting
Found in: Page 769

Short Answer

Question: What accounts on the balance sheet must be evaluated when completing the investing activities section of the statement of cash flows?

Answer

Investing activity records transactions related to long-term assets and long-term note receivables.

See the step by step solution

Step by Step Solution

Step 1: Evaluating T-accounts of long-term assets 

While computing cash generated from or used for investing activities it is important to evaluate the T-accounts of each long-term asset. Always remember that accumulated depreciation should be adjusted in operating activities only.

Step 2: Evaluating T-accounts of long-term note receivables

Long-term note receivables are also adjusted in cash flow from investing activities.

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