Multiple choice

1. Newbury Books Company reported Insurance Expense for the current year of $38,900. During the same period, the Prepaid Insurance account decreased $5,100. Cash paid for insurance was:

$38,900.

$44,000.

$33,800.

$5,100.

2. If $350,000 of bonds are issued during the year, but $150,000 of old bonds are retired during the year, the statement of cash flows will show a(n):

net gain on retirement of bonds of $200,000.

net increase in cash of $200,000.

increase in cash of $350,000 and a decrease in cash of $150,000.

net decrease in cash of $200,000.

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3. Which of the following would be reported on a statement of cash flows as an investing activity?

Sale of equipment for cash

Purchase of treasury stock

Paying cash dividends

Depreciation expense

4. Acquisitions of treasury stock would be reported on a statement of cash flows as:

investing activities.

operating activities.

financing activities.

either investing activities or operating activities