Quiz 10 multiple choice questions
b. future cash flows.
c. their ability to pay debts and dividends.
d. future net income.
b. income statement and the statement of stockholders’ equity.
c. the balance sheet and the statement of stockholders’ equity.
d. statement of stockholders’ equity and the cash reported on the balance sheet.
b. revenues
c. Paying accounts payables
d. Paying utilities
b. long-term liability accounts.
c. current assets and current liabilities.
d. long-term asset accounts.
b. operating activities.
c. managerial activities.
d. financing activities.
b. operating activity.
c. separate disclosure only.
d. investing activity.
7 A purchase of new equipment on a note payable under the
direct method would be reported:
a. as a separate disclosure as a non-cash transaction.
b. in the operating section of the cash flow statement.
c. in the investing section of the cash flow statement.
d. in the financing section of the cash flow statement.
8 Of the following, which is NOT classified as an
investing activity on the statement of cash flows?
a. Purchasing land
b. Sale of equipment for cash
c. Collecting the principal on loans
d. Selling goods and services
b. increase in cash flow from financing activities.
c. increase in cash flow from investing activities.
d. decrease in cash flow from financing activities.
b. Increase in inventory
c. Decrease in prepaid insurance
d. Decrease in accounts payable
A lender wants to know if they can collect on their
loans. A cash flow statement for the company owing the money will help the
lender to predict all EXCEPT:
a. management decisions.b. future cash flows.
c. their ability to pay debts and dividends.
d. future net income.
2 The cash flow statement is the communicating link
between the:
a. the balance sheet and the accrual based income
statement.b. income statement and the statement of stockholders’ equity.
c. the balance sheet and the statement of stockholders’ equity.
d. statement of stockholders’ equity and the cash reported on the balance sheet.
3 Which of the following is NOT a part of operating
activities?
a. Paying dividendsb. revenues
c. Paying accounts payables
d. Paying utilities
4 Operating cash flows affect:
a. equity accounts.b. long-term liability accounts.
c. current assets and current liabilities.
d. long-term asset accounts.
5 In order to be successful over the long run, the main
source of a company’s cash must come from:
a. investing activities.b. operating activities.
c. managerial activities.
d. financing activities.
6 A company settles a long-term note payable plus
interest by paying $68,000 cash toward the principal amount and $5,440 cash for
the interest. Under the direct method of reporting interest, the $5,440 would
be listed as a(n):
a. financing activity.b. operating activity.
c. separate disclosure only.
d. investing activity.
a. as a separate disclosure as a non-cash transaction.
b. in the operating section of the cash flow statement.
c. in the investing section of the cash flow statement.
d. in the financing section of the cash flow statement.
a. Purchasing land
b. Sale of equipment for cash
c. Collecting the principal on loans
d. Selling goods and services
9 An increase in long-term mortgage payable may mean
a(n):
a. decrease in cash flow from investing activities.b. increase in cash flow from financing activities.
c. increase in cash flow from investing activities.
d. decrease in cash flow from financing activities.
10 Of the following, which would be added back to net
income in the operating section of a cash flow statement using the indirect
method?
a. Increase in accounts receivableb. Increase in inventory
c. Decrease in prepaid insurance
d. Decrease in accounts payable
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