Question
1- Investing activities do not include the: Multiple Choice Purchase of plant assets. Lending and collecting on notes receivable. Issuance of common stock. Sale of
1- Investing activities do not include the:
Multiple Choice
Purchase of plant assets.
Lending and collecting on notes receivable.
Issuance of common stock.
Sale of plant assets.
Sale of short-term investments other than cash equivalents.
2- When preparing a statement of cash flows using the indirect method, each of the following should be classified as an operating cash flow except:
Multiple Choice
An increase in accounts receivable.
A decrease in accounts payable.
Proceeds from the disposal of a long-term asset with no gain or loss.
An increase in prepaid expenses.
A decrease in accrued expenses payable.
3- An example of a transaction that must be disclosed as a noncash investing and financing activity includes all but which of the following?
Multiple Choice
The retirement of debt by issuing equity stock.
A transaction exchanging cash equivalents for cash.
The leasing of assets in a transaction that qualifies as a capital lease.
The purchase of noncash assets in exchange for equity or debt securities.
The purchase of long-term assets financed by a cash down payment and a note payable to the seller for the balance.
4- Cash flows from selling trading securities are usually reported in the statement of cash flows as part of:
Multiple Choice
Operating activities.
Financing activities.
Investing activities.
Noncash activities.
This is not reported in the statement of cash flows.
5- Which of the following transactions or events should be reported as a source of cash from operating activities when using the direct method?
Multiple Choice
Credit sales.
Cash collections from customers.
Depreciation expense.
Cash received from the sale of a building.
Cash received from the sale of treasury stock.
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