1. Which of the following statements is not correct when comparing the cash flow statement prepared using the direct method versus that prepared using the indirect method for the fiscal period of an economic entity? Both have three sections. Both have identical investing activities section. Both have identical financing activities section Both have identical operating activities section 2. Converting revenues to cash inflows under the direct method, would require which of the following adjustments for the indicated changes in accrued revenues and deferred revenues? Increase in Accrued Revenue Added Increase in Deferred Revenue Deducted Increase in Accrued Revenue Increase in Deferred Revenue Deducted Deducted Increase in Accrued Revenue Deducted Increase in Deferred Revenue Added Increase in Accrued Revenue Added Increase in Deferred Revenue Added 3. Converting expenses to cash outflows under the direct method would require which of the following adjustments for the indicated changes in accrued expenses and deferred expenses? Increase in Accrued Expense Deducted Increase in Deferred Expense Deducted Increase in Accrued Expense Deducted Increase in Deferred Expense Added Increase in Accrued Expense Added Increase in Deferred Expense Deducted Increase in Accrued Expense Increase in Deferred Expense Added Added 4. In determining net cash flow from operating activities, a decrease in accounts payable require the following adjustment The decrease should be deducted from the cost of goods sold under the direct method. The decrease should be added to the cost of goods sold under the direct method. The decrease should be added to net income under the indirect method No adjustment needed. 5. When preparing a cash flow statement, an increase in accounts receivable during a period would require which of the following adjustments in determining cash flow from operating activities? Direct Method Deducted from sales revenue Direct Method Added to sales revenue Direct Method Deducted from sales revenue Direct Method Added to sales revenue Indirect Method Added to net income Indirect Method Added to net income Indirect Method Deducted from net income Indirect Method Deducted from net income 6. When preparing a cash flow statement, an increase in wages payable during a period would require which of the following adjustments in determining cash flow from operating activities? Direct Method Added to wages expense Direct Method Deducted from wages expense Direct Method Deducted from wages expense Direct Method Added to wages expense Indirect Method Added to net income Indirect Method Deducted from net income Indirect Method Added to net income Indirect Method Deducted from net income 7. On 1/1/2016, Illini had $200,000 bonds that were originally issued at $180,000. On the maturity day of 12/31/16, Illini repaid the principal amount of $200,000 to bond holders? The financing cash flows from the principal payment would be $0. -$20,000. -$180,000. -$200,000. 8. Use the following information for questions 8, 9, and 10: Illini provides the following information for fiscal year 2019: Net Loss $160,000 Depreciation expense $12,000 Decrease in inventory $30,000 Increase in accounts payables $40,000 Purchase of land by issuing bonds $150,000 Loss on investment $24,000 Proceeds from selling investment $300,000 Purchase of treasury stock $90,000 Gain on sale of equipment $20,000 Proceeds from sale of equipment $30,000 Loans made to affiliated entities $210,000 Dividends paid to shareholders $60,000 Proceeds from issuing bonds $300,000 Proceeds from issuing stock $240,000 The cash flows from operating activities would be -$84,000. -$134,000. -$74,000. -$154,000. 9. The cash flows from investing activities would be -$180,000. $120,000. $30,000 $330,000. 10. The cash flows from financing activities would be $540,000. $390,000. $330,000. $480,000