Question

Cash outflows to purchase available-for-sale securities on a long-term basis would be reported in the investing section of the cash flow statement.

Question 25 options:

	a) True
	b) False

Question 26 (1 point)

A cash flow statement starts with net income and adds (or deducts) items that did not affect cash to arrive at net cash provided by operating activities if the indirect method is used.

Question 26 options:

	a) True
	b) False

Question 27 (1 point)

Saved

The issue of bonds to acquire land would be shown in the financing section.

Question 27 options:

	a) True
	b) False

Question 28 (1 point)

If equipment was sold for $15,000 and a loss of $10,000 was recognized, investing activities would show an inflow of $15,000.

Question 28 options:

	a) True
	b) False

Question 29 (1 point)

Saved

Free cash flow is calculated by deducting cash used (provided) by investing activities from cash provided (used) by operating activities.

Question 29 options:

	a) True
	b) False

Question 30 (1 point)

Saved

A company has credit sales of $150,000 and cash sales of $90,000 during the same year that the Accounts Receivable account decreased by $20,000. What was the total cash received from customers?

Question 30 options:

	a) $220,000
	b) $260,000
	c) $170,000
	d) $130,000

Question 31 (1 point)

Cash inflows from investing activities include:

Question 31 options:

	a) sale of common shares.
	b) purchase of equipment.
	c) sale of land.
	d) issue of long-term debt.

Question 32 (1 point)

Operating activities do not include cash flows

Question 32 options:

	a) from revenue.
	b) from sale of equipment.
	c) for income taxes.
	d) for wages.

Question 33 (1 point)

Which of the following would decrease net cash provided by operating activities?

Question 33 options:

	a) Increase in accounts payable
	b) Amortization expense
	c) Increase in inventory
	d) Loss on sale of equipment

Answer 1

Answer-25)- TRUE- Cash outflows to purchase available-for-sale securities on a long-term basis would be reported in the investing section of the cash flow statement.

26)- FALSE- A cash flow statement starts with net income and adds (or deducts) items that did not affect cash to arrive at net cash provided by operating activities if the indirect method is used.

27)- FALSE- The issue of bonds to acquire land would be shown in the financing section.

Explanation- he issue of bonds to acquire land would be shown in the schedule of non investing and financing activities.

28)- TRUE-If equipment was sold for $15000 and a loss of $10000 was recognized, investing activities would show an inflow of $15000.

29)- FALSE- Free cash flow is calculated by deducting cash used (provided) by investing activities from cash provided (used) by operating activities.

Explanation- Free cash flow = Net cash provided by operating activities- Capital expenditure-Cash dividends paid

30)- The total cash received from customers was = $260000.

Explanation- Total cash received from customers = Cash sales+ (Credit sales+ Decrease in accounts receivable)

= $90000+ ($150000+$20000)

= $260000

31)- Cash inflows from investing activities include = Sale of land.

32)- Operating activities do not include cash flows= from sale of equipment.

33)- The following would decrease net cash provided by operating activities= Increase in inventory.