Question

The statement of cash flows begins with the

	Financing activities section.
	Operating activities section.
	Investing activities section.
	Last year's ending cash balance.

In which section of the statement of cash flows each item would be reported?

Paid cash for office supplies	(Click to select)Operating ActivitiesInvesting ActivitiesFinancing Activities
Paid cash for a computer	(Click to select)Operating ActivitiesInvesting ActivitiesFinancing Activities
Distributed cash dividend	(Click to select)Operating ActivitiesInvesting ActivitiesFinancing Activities
Received cash for services	(Click to select)Operating ActivitiesInvesting ActivitiesFinancing Activities
Purchased treasury stock	(Click to select)Operating ActivitiesInvesting ActivitiesFinancing Activities
Received cash for note payable	(Click to select)Operating ActivitiesInvesting ActivitiesFinancing Activities

Examples of external users of accounting information include: creditors, future investors, the government, and managers of the company.

Distributed a stock dividend	(Click to select)Cash InflowCash OutflowDoes not involve cash
Accrued wage expense	(Click to select)Cash InflowCash OutflowDoes not involve cash
Paid cash for office supplies	(Click to select)Cash InflowCash OutflowDoes not involve cash
Sold a delivery truck	(Click to select)Cash InflowCash OutflowDoes not involve cash
Received dividends	(Click to select)Cash InflowCash OutflowDoes not involve cash
Signed a note payable	(Click to select)Cash InflowCash OutflowDoes not involve cash

Using the indirect method, which item is a negative adjustment to net income?

	Depreciation.
	Increase in current liabilities.
	Increase in current assets.
	Depreciation and increase in current liabilities.
	Increase in current liabilities and current assets.

Using the indirect method, the operating activities section begins with net cash flow provided by (used in) operating activities.

	True
	False

Using the indirect method, depreciation is a positive adjustment to net income.

	True
	False

Which items(s) is (are) included in the investing section of the statement of cash flows?

	Received $10,000 in dividends.
	Distributed a $30,000 cash dividend.
	Purchased a patent for $100,000
	Paid $1,000 cash for interest.

Which item is a cash inflow included in the investing activities section of the statement of cash flows?

	Received $10,000 in dividend income.
	Received $10,000 interest on an investment.
	Sold a delivery truck for $10,000.
	Sold inventory for $10,000.

Which item is not included in the financing activities section of the statement of cash flows?

	Issued stock for $10,000.
	Repurchased treasury stock for $10,000.
	Paid $10,000 in principal.
	Paid $1,000 of interest expense on a note payable.
	All of the above are included in the financing activities section.

Which item is a cash inflow included in the financing activities section of the statement of cash flows?

	Distributed a $10,000 cash dividend.
	Purchase of treasury stock.
	Borrowed cash and signed a $100,000 note.
	Received $10,000 in dividends.

The operating activities section of the statement of cash flows indicates how efficient the company is at managing current assets and current liabilities.

	True
	False

It is unusual for a healthy, well-established company to report negative cash flows from investing activities.

	True
	False

The financing activities section doesn't have an obvious direction for cash flows like the operating and investing sections do.

	True
	False

Under the direct method, which item is a cash outflow reported in the operating activities section?

	Depreciation.
	Cash collected from customers.
	Accrued interest expense.
	Cash paid to suppliers.
	Issued common stock.

The Silver Fox Co. reported the following information:

Issued common stock and received $10,000.
Received $5,000 for future services.
Paid $3,000 for office equipment.
Paid $3,000 to employees.
Collected $9,000 from customers.

Using the direct method, what is the net cash provided by operating activities?

	$5,000
	$11,000
	$14,000
	$2,000

Under the direct method, which item is not a cash inflow reported in the operating activities section?

	Cash collected from customers.
	Received cash from customers previously billed
	Issued common stock.
	Received cash for future revenues.

Answer 1