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1) The retirement of long-term debt by the issuance of common stock should be presented in a statement of cash flows as a Financing activities

1) The retirement of long-term debt by the issuance of common stock should be presented in a statement of

cash flows as a

Financing activities Investing activities

A. Yes No

B. No Yes

C. No No

D. Yes Yes

2) In a statement of cash flows, which of the following items is reported as a cash outflow from financing

activities?

I. Payments to retire mortgage notes.

II. Interest payments on mortgage notes.

III. Dividend payments.

A. I, II, and III. B. I and III. C. I only. D. II and III.

3) In a statement of cash flows, receipts from sale of property, plant, and equipment and other productive

assets should generally be classified as cash inflows from

A. Operating activities C. Financing activities

B. Investing activities D. Selling activities

4) Cheesecake Manufacturing Co. purchased a 3-month Treasury bill. In preparing Cheesecakes statement

of cash flows, this purchase would

A. Have no effect C. Be treated as an outflow from lending activities

B. Be treated as an outflow from financing activities D. Be treated as an outflow from investing activities

5) In a statement of cash flows, interest payments to lenders and other creditors should be classified as cash

outflows for

A. Financing activities C. Borrowing activities

B. Lending activities D. Operating activities

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