Chapter 11

Question 1

How does simple interest differ from compound interest?

Answer 1

Simple interest includes interest on the initial investment only.

Question 2

Dividends received from an investment.

Answer 2

Operating

Question 3

Dividends paid to shareholders

Answer 3

Financing

Question 4

Property, plant and equipment purchased for cash.

Answer 4

Investment

Question 5

Property, plant, and equipment purchased by issuing stock.

Answer 5

Noncash.

Question 6

Notes receivable accepted for lending cash.

Answer 6

Investing

Question 7

Notes payable issued for borrowing cash.

Answer 7

Financing

Question 8

Purchase of long-term assets by issuing debt

Answer 8

Noncash activity

Question 9

Includes cash receipts and cash payments for transactions relating to revenue and expense activities.

Answer 9

Operating activities

Question 10

Includes cash transactions involving the purchase and sale of long-term assets and current investments.

Answer 10

Investing activities

Question 11

Includes cash transactions resulting from the external financing of a business.

Answer 11

Financing activities

Question 12

Purchase of long-term assets by issuing debt

Answer 12

Non-cash

Question 13

Sale of goods or services

Answer 13

Cash Inflows

Question 14

For Inventory

Answer 14

Cash Outflows