13. When a company has Net Income ($60,000), Accounts Receivable increased by $30,000, and Accounts Payable increased by $30,000, net cash provided by operating activity is $0.

True

False

. Which of the following is NOT a permanent account?

Dividends

Income Summary

Depreciation Expense

Unearned Revenue

21. Operating activities do not include cash

inflows from revenue

inflows from sale of equipment

outflows for income taxes

outflows for wages

22. Which of the following would decrease net cash provided by operating activities?

Decrease in accounts payable

Depreciation expense

Decrease in inventory

Loss on sale of equipment

23. When accounts payable increase during the year

operating expenses on an accrual basis are higher than they are on a cash basis

administrative expenses on an accrual basis are lower than they are on a cash basis

net income on a cash basis is lower

depreciation expenses on an accrual basis are higher than they are on a cash basis

25. Which of the following characteristics do not apply to cash equivalents?

Short-term

Highly liquid

Readily convertible into cash

Sensitive to interest rate changes

26. Generally, the most important category on the statement of cash flows is cash flows from

operating activities

investing activities

financing activities

significant noncash activities