1) Which of the following activities would affect the OPERATING section of the cash flow statement this year? (Check all that apply)

a) Selling products for cash

b) Buying a machine on credit

c) Buying inventory for cash

d) Paying back debt

e) Issuing shares of stock

2) Which of the following activities would affect the INVESTING section of the cash flow statement this year? (Check all that apply)

a) Buying another company for cash

b) Receive cash from selling a product

c) Issuing long term debt

d) Paying a dividend

e) Paying your income taxes

3)Suppose a firm recognizes sales revenue of $200 on its income statement for a period. Of this amount, $150 was for cash and $50 was on credit. How would this be shown on a cash flow statement that uses the INDIRECT method? (Ignore the cost side of things)

a) Net income is $200 and there is an adjustment downward of $150 related to receivables

b) Net income is $150 and there is an adjustment downward of $150 related to receivables

c) Net income is $200 and there is an adjustment downward of $50 related to receivables

d) Net income is $150 and there are no adjustments necessary on the cash flow statement

4) Suppose we are looking at a cash flow statement constructed using the INDIRECT method. We see a NEGATIVE adjustment of $5000 related to Accounts Payable. Which of the following are correct interpretations of this? (Check all that apply)

a) The firm paid $5000 less to suppliers than they had recorded as an expense on the income statement

b) The firm paid $5000 more to suppliers than they had recorded as expense on the income statement

c) The firm received $5000 from customers this year

d) The firm paid $5000 to suppliers this year.

5.

Suppose a firm recognizes sales revenue of $100 on its income statement for a period. Of this amount, $80 was for cash and $20 was on credit. What is the overall impact on the operating section of this information? (Ignore the cost side of the sale)

Cash from Operations goes down by 20

Cash from Operations goes up by 20

Cash from Operations goes up by 80

Cash from Operations goes up by 100

6.

Suppose a firm recognizes sales revenue of $200 on its income statement for a period. Of this amount, $150 was for cash and $50 was on credit. How would this be shown on a cash flow statement that uses the INDIRECT method? (Ignore the cost side of things)

Net Income is $200 and there is an adjustment downward of $50 related to receivables

Net Income is $150 and there are no adjustments necessary on the cash flow statement

Net Income is $150 and there is an adjustment downward of $50 related to receivables

Net Income is $200 and there is an adjustment downward of $150 related to receivables

7.

Suppose we are looking at a cash flow statement constructed using the INDIRECT method. We see a positive adjustment in the operating section of $1000 for Depreciation. Which of the following are correct interpretations of this? (Check all that apply)

Income was lower by $1000 because of Depreciation expense

Depreciation provided cash of $1000

The firm sold long-term assets for $1000

The firm invested $1000 of cash in long-term assets

8.

Suppose we are looking at a cash flow statement constructed using the INDIRECT method. We see a NEGATIVE adjustment of $5000 related to Accounts Payable. Which of the following are correct interpretations of this? (Check all that apply)

The firm paid $5000 to suppliers this year

The firm paid $5000 less to suppliers than they had recorded as expense on the income statement this year

The firm received $5000 from customers this year

The firm paid $5000 more to suppliers than they had recorded as expense on the income statement this year