1. Buying or selling long-term assets is reflected in the:

a. Investing activities section of the cash flow statement

b. Financing activities section of the cash flow statement

c. Operating activities section of the cash flow statement

d. Current assets section of the balance sheet

2. Cash flow from financing is supplied by:

a. Banks and shareholders

b. Customers and vendors

c. Customers and analysts

d. Vendors and government agencies

3. Which of the following is true about a statement of cash flows?

a. Preparation of a statement of cash flows uses accrual accounting to calculate cash balances.

b. On a statement of cash flows, activities are divided into three categories.

c. A statement of cash flows is prepared using the direct method, while a cash flow statement is prepared using the indirect method.

d. A statement of cash flows is prepared on the accrual basis of accounting

4. An increase in property, plant and equipment from one year to the next:

a. Decreases cash flow

b. Increases cash flow

c. None of the choices

d. Does not affect cash flow

5. If a bank loan increases from period one to period two, what happened to cash?

a. Cash decreased

b. Cash remained the same

c. Cash increased

d. None of the choices