Multiple Choice: Evaluating Cash Flows Select the best answer for each of the following:

1. An issuance of stock is reported in the cash flow statement as a part of:

a. Cash flows from investing.

b. Cash flows from financing.

c. Cash flows from operations.

d. Cash flows from unaffiliated parties.

2. The section dealing with cash flows from operations in the cash flow statement provides information on:

a. Vehicles and equipment purchased during the period.

b. Bank loans paid during the period.

c. Payments to suppliers during the period.

d. Contributions by owners during the period.

3. Good cash management practices include:

a. Avoiding keeping any cash on hand because cash is a nonearning asset.

b. Paying suppliers as quickly as possible to avoid keeping excess amounts of cash on hand.

c. Waiting as long as possible to pay suppliers, even if they offer substantial cash discounts for early payment.

d. Keeping only enough cash on hand to meet anticipated needs and to provide some protection against uncertainties.

4, Which of the following is not considered to be part of the internal control system over cash?

a. Depositing all cash receipts in the bank on a daily basis.

b. Investing all surplus cash receipts in short-term securities to earn an appropriate return.

c. Making all payments by check.

d. Having separate individuals responsible for the receipt and disbursement of cash.