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Operating Activities
Investing Activities
Financing Activities
General Questions
100

A company records depreciation of $25,000. How is this recorded in the operating activities section?

Depreciation is added back into net income

100
All of the following would be considered investing activities except: a. purchase of equipment for cash. b. receipt of cash dividends from investments. c. sale of land for cash.
B. receipt of cash dividends from investments
100
All of the following would be classified as financing cash flows except: a. interest paid on long-term debt b. dividends paid on preferred stock c. purchases of treasury stock
A. interest paid on long-term debt
100
The primary purpose of the statement of cash flows is to provide information a. about the cash receipts and cash payments of an entity during a period. b. about the entity's ability to meet its obligations, its ability to pay dividends, and its needs for external financing c. about the operating, investing, and financing activities of an entity during a period.
A. about the cash receipts and cash payments of an entity during a period.
200
The method of calculating net cash flow from operating activities that results in the presentation of a condensed cash receipts and cash disbursements statement is the: a. indirect method. b. direct method c. cash flow method
B. direct method
200
Investing activities include all of the following except: a. making and collecting loans b. obtaining cash from creditors c. acquiring and disposing of investments
B. obtaining cash from creditors
200
Which type of cash flow activity includes obtaining cash from issuing debt and repaying amounts borrowed and obtaining cash from stockholders and paying them dividends? a. Investing b. Operating c. Financing
C. financing
200
An increase in short-term notes receivable will be added to net income under the indirect method of preparing the statement of cash flows. True or False
False
300
All of the following adjustments would be deducted in determining net cash flow from operating activities using the indirect method except: a. amortization of bond premium b. decrease in deferred income tax liability c. increase in accrued liabilities
C. increase in accrued liabilities
300
Sold land at book value of $25,000. What is reported in the investing activities section?
Sale of land increase of $25,000
300
Financing activities include all of the following except: a. Making and collecting loans b. Obtaining cash from creditors c. Obtaining capital from owners
A. making and collecting loans
300
A statement of cash flows typically would not disclose the effects of a. capital stock issued at an amount greater than par value. b. stock dividends declared c. cash dividends paid
B. stock dividends declared
400
The reconciliation of net income to net cash flow from operating activities is reported under: a. the direct method only b. the indirect method only c. both methods
C. both methods
400
Purchased land for $500,000. What is reported in the investing activities section?
Purchased land decrease of $500,000.
400
Bonds payable decreased $40,000 during the year. As indicated from the additional information, the company redeemed the bonds at their book value. How is this reported in the financing section?
Redemption of Bonds decreased by $40,000
400
Which method adjusts net income for items that affected reported net income but did not affect cash? a. Accrual b. Indirect c. Direct
B. indirect
500
Operating activities include all of the following except: a. Cash receipts from sale of goods and services b. Cash payments to suppliers c. Making loans
C. Making loans
500
Lending money to a customer for $100,000. What is reported in the investing activities section?
Decrease of $100,000.
500
Tax Consultants issued common stock of $160,000 at par. What is reported in the financing section?
Sale of common stock increased $160,000
500
Only the comparative balance sheet is needed to prepare the statement of cash flows. True or False
False