A healthy company should expect cash flows from operating activities and investing activities to be Operating Investing a. an inflow an outflow b. an inflow an inflow c. an outflow an inflow d. an outflow an outflow The indirect method of preparing the statement of cash flows refers to how cash flows are assembled for a. financing activities b. investing activities c. operating activities d. all activities in the statement Riley Company reports its income from investments under the equity method and recognized income of $25,000 from its investment in Wood Co. during the current year, even though no dividends were declared or paid by Wood during the year. On Riley's statement of cash flows (indirect method), the $25,000 should a. not be shown. b. be shown as cash inflow from investing activities. c. be shown as cash outflow from financing activities. d. be shown as a deduction from net income in operating activities. Which of the following items is considered by the FASB to be a change in accounting estimate? a. last year's ending inventory was understated b. from straight-line to sum-of-the-years'-digits method of depreciation c. change from percentage completion to completed contract for construction contracts d. an asset purchased last year was debited to an expense account Executory costs in a lease agreement include a. maintenance. b. property taxes. c. insurance. d. all of these