Cash purchase of land

	a.	Net income will be increased or adjusted upward.
	b.	Net income will be decreased or adjusted downward.
	c.	Cash flows from investing activities
	d.	Cash flows from financing activities
	e.	Reported as a note or not required to be reported on the cash flow statement

2 points

QUESTION 3

Which of the following events will appear in the cash flows from financing activities section of the statement of cash flows?

	a.	Cash purchases of equipment.
	b.	Cash purchases of bonds issued by IBM.
	c.	Cash received in the normal course of a sales transaction.
	d.	Cash purchase of treasury stock.

2 points

QUESTION 4

Increase in accounts payable during the year

	a.	Net income will be increased or adjusted upward.
	b.	Net income will be decreased or adjusted downward.
	c.	Cash flows from investing activities
	d.	Cash flows from financing activities
	e.	Reported as a note or not required to be reported on the cash flow statement

2 points

QUESTION 5

An addition to the building was completed at a cost of $28,000

	a.	Net income will be increased or adjusted upward.
	b.	Net income will be decreased or adjusted downward.
	c.	Cash flows from investing activities
	d.	Cash flows from financing activities
	e.	Reported as a note or not required to be reported on the cash flow statement

2 points

QUESTION 6

Issuance of bonds for plant assets

	a.	Net income will be increased or adjusted upward.
	b.	Net income will be decreased or adjusted downward.
	c.	Cash flows from investing activities
	d.	Cash flows from financing activities
	e.	Reported as a note or not required to be reported on the cash flow statement

2 points

QUESTION 7

The statement of cash flows provides answers to all of the following questions except

	a.	where did the cash come from during the period?
	b.	what was the cash used for during the period?
	c.	what is the impact of inflation on the cash balance at the end of the year?
	d.	what was the change in the cash balance during the period?

2 points

QUESTION 8

Prepaid rent increased $2,000 during the year

	a.	Net income will be increased or adjusted upward.
	b.	Net income will be decreased or adjusted downward.
	c.	Cash flows from investing activities
	d.	Cash flows from financing activities
	e.	Reported as a note or not required to be reported on the cash flow statement

2 points

QUESTION 9

Bonds payable of $50,000 were issued

	a.	Net income will be increased or adjusted upward.
	b.	Net income will be decreased or adjusted downward.
	c.	Cash flows from investing activities
	d.	Cash flows from financing activities
	e.	Reported as a note or not required to be reported on the cash flow statement

2 points

QUESTION 10

Decrease in accounts payable during the year

	a.	Net income will be increased or adjusted upward.
	b.	Net income will be decreased or adjusted downward.
	c.	Cash flows from investing activities
	d.	Cash flows from financing activities
	e.	Reported as a note or not required to be reported on the cash flow statement