Question 1

There are three classifications of cash flows which are Operating, Investing and Financing. Within each there are specific transactions that will create net cash used or net cash flows. Describe your understanding of 2 separate transactions within each classification and provide a detailed example of the accounting for each number that will be shown on the Statement of Cash Flows.

Question 2

In recent years, the treatment of the intangible asset "Goodwill" has undergone significant change as a result of the implementation of FASB 142. Goodwill is the value of a going concern. You can't touch it. You can't bank it. You can't sell it separately. By itself, it is valueless.

Assuming that all unrelated acquisitions are at "arm's length," what is all the fuss about valuing Goodwill? Why should you be concerned about it?

Question 3

For years, companies used master files to store data. Databases are now being used in their place. Why did this transformation take place? What are the advantages and disadvantages of using databases rather than files? Why is it important for an accountant to understand how a database works? Identify at least three functions in which an accountant would use a database.