1) Which of the following items are included as an operating activity on the statement of cash flows, using the direct method?

A) purchase of treasury stock

B) payment of dividends

C) issuance of stock

D) payment of interest expense

2) Regarding the use of a spreadsheet for the preparation of the statement of cash flows, which of the following statements is incorrect?

A) The spreadsheet starts with the beginning balance sheet and concludes with the ending balance sheet.

B) When companies face complex situations, a spreadsheet can help in preparing the statement of cash flows.

C) The spreadsheet cannot be used for the direct method.

D) Accountants can prepare the statement of cash flows directly from the lower part of the spreadsheet.

3) Which of the following is considered an operating activity on the statement of cash flows prepared using the direct method?

A) dividends paid to stockholders

B) sale of merchandise inventory for cash

C) payment to purchase equipment

D) the receipt of cash from sale of equipment