1) Which section of the statement of cash flows is considered the most important indicator of a companys financial performance based on its day-to-day activities?

Select one:

a. Cash Flow from Operating Activities

b. Cash Flow from Investing Activities

c. Cash Flow from Budgeting Activities

d. Cash Flow from Financing Activities

2) Which of the following items is part of investing activities under cash flow statement?

Select one:

a. Selling long-term assets

b. Paying employee salaries

c. Paying interest on loan

d. Cash collection from customers

3) The net increase in cash from operating activities for Orange Inc. was $77,689. The net decrease in cash due to investing activities was $20,000. The free cash flow for Orange Inc. was (M)

Select one:

a. $97,689

b. $57,689

c. $67,869

d. $107,689

4) When receiving and repaying a loan:

Select one:

a. Equity increases

b. Cash flow is not affected

c. Cash flow is affected

d. Equity decreases

5) Using the indirect method to prepare a statement of cash flow, the amount of depreciation expense to be added back to net income can be determined from:

Select one:

a. The comparative balance sheet only

b. The statement of owners' equity

c. The income statement only

d. Both the comparative balance sheet and income statement

6) In which section of the statement of cash flow would a trade of long-term investments for new equipment appear?

Select one:

a. Operating activities section

b. Investing activities section

c. Financing activities section

d. Not included in the statement of cash flow