1. When preparing a statement of cash flows, net cash from operating activities + investing activities + financing activities = net increase/decrease in cash for the year. What appears next on the statement?

a. Add the beginning balance of cash for the year to determine the ending balance of cash for the year.

b. Deduct the beginning balance of cash for the year to determine the ending balance of cash for the year.

c. Deduct cash paid to suppliers to determine the ending balance of cash for the year.

d. Nothing. The statement is complete.

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2. An entitys net cash flow from operating activities is important for users of the statement of cash flows because it:

a. indicates the entitys ability to generate cash.

b. represents the entitys cash flows from normal business operations.

c. indicates that the business is meeting its current obligations.

d. all of the options listed are true.

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3. Cash outflows from financing activities include:

a. cash paid for the purchase of shares.

b. the lending of money to another business.

c. payment of income tax.

d. dividends paid to shareholders.