Question 5

1. When preparing the statement of cash flows under the indirect method, an appropriate procedure would be to

   		subtract an increase in accounts receivable.
   		subtract an increase in wages payable.
   		subtract amortization expense.
   		determine cash paid to suppliers.
   		add a gain from the sale of a fixed asset.

1 points

Question 6

1. Which of the following statements is incorrect, regarding the effect of depreciation on a statement of cash flows using the indirect method?

   		Depreciation expense is not an outflow of cash.
   		Ignoring income tax effects, increasing depreciation expense will increase cash flows from operations.
   		Depreciation expense is not a source of cash.
   		Depreciation expense is added in the cash flow from operations section.
   		Depreciation expense will reduce the net income used in determining cash flows from operations.

1 points

Question 7

1. All of the following would be included in a company's financing activities except

   		purchasing treasury stock.
   		issuing equity securities.
   		borrowing cash from a bank.
   		interest payments.
   		repayment of amounts borrowed.