multiple choice 1 which of the following is a cash flow from an investing activity a 4352152



1.Which of the following is a cash flow from an investing activity?

a.payment for advertising receipt from a customer for a previous credit sale received from sale of equipment

d.payment of dividends

Paid for inventory$ 20,000

Paid wages to employees40,000

Received from cash sales100,000

Paid for equipment60,000

Received a loan70,000

What was the cash flow from financing activities?

a.$70,000 inflow

b.$80,000 outflow

c.$120,000 outflow

d.$60,000 outflow

3.The direct and indirect formats are methods of preparing the

a.operating activities section of a statement of cash flows

b.investing activities section of a statement of cash flows

c.income statement

d.balance sheet

4.A company's net income and operating cash flow are _______ equal.





5.In the long run, a firm must depend on its _______ activities to meet most of its cash flow needs.





6.The primary difference between the cash flows statement and all other primary external financial statements is that the cash flows statement is

a.not an accrual based statement and all others are

b.not prepared unless the firm is a manufacturer optional statement in the external reporting package

d.prepared before the end of the year and not after

7.Which of the following best describes the purpose of the statement of cash flows?

a.identify the revenues and expenses of the accounting period the inflows and outflows of cash

c.balance current period revenues with those of the previous period assets, liabilities and owners' equity as of a specific date

8.Which of the following is a fundamental purpose of the statement of cash flows?

To report the       To report the

inflows of cash    outflows of cash

a.Yes             Yes

b.Yes             No

c.No              Yes

d.No              No

9.Differences between the direct format and indirect format of the statement of cash flows are found in which section(s) of the statement?

a.financing activities

b.investing activities

c.operating activities

d.all three sections (operating, financing, investing)

10.The statement of cash flows is designed to report the previous period's income statement relates to the current period's income statement

b.only the sources and uses of cash during the current period

c.the cash from operating, financing and investing activities of the firm during the current period

d.the effects of the current period's income statement on the current period's balance sheet

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