Exam 2

Question 1

net income (classifying cash flows)

Answer 1

operating

Question 2

paid cash dividends (classifying cash flows)

Answer 2

financing

Question 3

issued common stock (classifying cash flows)

Answer 3

financing

Question 4

issued bonds (classifying cash flows)

Answer 4

financing

Question 5

redeemed bonds (classifying cash flows)

Answer 5

financing

Question 6

sold long-term investments (classifying cash flows)

Answer 6

investing

Question 7

purchased treasury stock (classifying cash flows)

Answer 7

financing

Question 8

sold equipment (classifying cash flows)

Answer 8

investing

Question 9

issued preferred stock (classifying cash flows)

Answer 9

financing

Question 10

purchased buildings (classifying cash flows)

Answer 10

investing

Question 11

purchased patents (classifying cash flows)

Answer 11

investing

Question 12

decrease in inventory (added or deducted)

Answer 12

added

Question 13

increase in accounts receivable (added or deducted)

Answer 13

deducted

Question 14

depreciation of fixed assets (added or deducted)

Answer 14

added

Question 14

loss on retirement of long term debt (added or deducted)

Answer 14

added

Question 14

Decrease in notes receivable due in 60 days from customers (added or deducted)

Answer 14

added

Question 15

increase in accounts payable (added or deducted)

Answer 15

added

Question 16

increase in salaries payable (added or deducted)

Answer 16

added

Question 17

decrease in prepaid expenses (added or deducted)

Answer 17

added

Question 18

amortization of patent (added or deducted)

Answer 18

added

Question 19

Increase in notes payable due in 120 days to vendors (added or deducted)

Answer 19

added

Question 20

gain on disposal of fixed assets (added or deducted)

Answer 20

deducted