acitivities

Question 1

There is usually a difference between the net income reported on the income statement and the net cash from operating activities shown on the statement of cash flows.

Answer 1

true

Question 2

By analyzing past cash flows, financial statement users can identify the primary sources and uses of cash.

Answer 2

true

Question 3

When a firm issues a long-term note payable, the amount that it receives for the note is considered a:

Answer 3

cash inflow from financing activities.

Question 4

On the statement of cash flows, which of the following consist of currency, bank accounts, and short-term, highly liquid investments?

Answer 4

cash and cash equivalents

Question 5

Issuing stock for cash and paying dividends in cash would be classified as which of the following on the statement of cash flows?

Answer 5

financing activities

Question 6

The statement of cash flows assumes that which basis of accounting is used when recording transactions and preparing the balance sheet and income statement?

Answer 6

accrual

Question 7

Which of the following are transactions that involve the acquisition or disposal of assets that will not be used or consumed in routine operations?

Answer 7

investing activities

Question 8

A corporation received $52,500 in cash from the sale of a building and paid $93,000 in cash for the purchase of new machinery. As a result, the statement of cash flows would report:

Answer 8

$40,500 as the net cash used by investing activities.

Question 9

What figure is arrived at when the totals from each section of the statement of cash flows are added together?

Answer 9

net change in cash and cash equivalents

Question 10

The method most often used by companies to prepare the statement of cash flows is the:

Answer 10

indirect method.

Question 11

Transactions that provide cash to the business to fund its activities are:

Answer 11

financing activities.

Question 12

The purchase or resale of treasury stock is reported in which section of the statement of cash flows?

Answer 12

Financing Activities

Question 13

Operating activities are routine business transactions that include providing services, paying wages, borrowing funds, selling stock, and paying dividends.

Answer 13

false

Question 14

Item5
1
points
eBookPrintReferencesView previous attemptItem 5
Current assets and current liabilities are often referred to as operating assets and liabilities.

Answer 14

true