The sale of inventory to a customer for cash is classified in the statement of cash flows as a(n):

• Noncash activity.
• Investing activity.
• Operating activity.
• Financing activity.

The payment of cash dividends is classified in the statement of cash flows as a(n):

• Financing activity.
• Noncash activity.
• Operating activity.
• Investing activity.

The purchase of inventory for cash is classified in the statement of cash flows as a(n):

• Investing activity.
• Noncash activity.
• Operating activity.
• Financing activity.

The purchase of long-term assets by issuing common stock is classified in the statement of cash flows as a(n):

• Noncash activity.
• Investing activity.
• Operating activity.
• Financing activity.

Which of the following is an example of a cash inflow from a financing activity?

• Receipt of cash from the sale of inventory.
• Receipt of cash from the sale of equipment.
• Receipt of cash from the issuance of common stock.
• Receipt of cash from the collection of a note receivable.

The repayment of a note payable is classified in the statement of cash flows as a(n):

• Investing activity.
• Operating activity.
• Noncash activity.
• Financing activity.

The indirect and direct methods

• Are used by companies about equally in actual practice.
• Arrive at different amounts for net cash flows from operating activities.
• Are two allowable methods to present operating activities in the statement of cash flows.
• Affect the presentations of operating, investing, and financing activities.

The sale of an intangible asset for cash is classified in the statement of cash flows as a(n):

• Operating activity.
• Investing activity.
• Noncash activity.
• Financing activity.

The balance of cash at the beginning of the year was $120,000, and at the end of the year was $140,000. Assuming operating cash flowsequal $90,000 and investing cash flows equal $(40,000), calculate financing cash flows for the year.

• $50,000.
• $(30,000).
• $10,000.
• $(70,000).

We can identify investing activities from additional information and changes in:

• Stockholders' equity accounts.
• Long-term asset accounts.
• Current asset and current liability accounts.
• Long-term liability accounts.

Which of the following is an example of a cash inflow from investing activities?

• Cash received from the sale of equipment.
• Payment of cash dividends.
• Receipt of cash dividends.
• Receipt of interest.

Which of the following is a noncash transaction?

• Purchase of long-term assets by issuing stock.
• Conversion of bonds payable into common stock.
• Purchase of long-term assets by issuing debt.
• All of these are noncash transactions.

The issuance of a note payable is classified in the statement of cash flows as a(n):

• Investing activity.
• Noncash activity.
• Operating activity.
• Financing activity.

Which of the following is an example of a cash outflow from an investing activity?

• Purchase of a building.
• Payment of cash dividends.
• Purchase of treasury stock.
• Payment of interest.

The payment of semi-annual interest on outstanding bonds payable is classified in the statement of cash flows as a(n):

• Operating activity.
• Financing activity.
• Investing activity.
• Noncash activity.

Which of the following methods for preparing the statement of cash flows is acceptable under U.S. GAAP?

• The direct method.
• The accrual accounting method.
• Both the direct and the indirect method are acceptable.
• The indirect method.

We can identify financing activities from additional information and changes in:

• Long-term asset accounts.
• Stockholders' equity accounts only.
• Current asset and current liability accounts.
• Long-term liability and stockholders' equity accounts.

We can identify operating activities from income statement information and changes in:

• Long-term asset accounts.
• Current asset and current liability accounts.
• Long-term liability accounts.
• Stockholders' equity accounts.

Which of the following is the correct sequence of presenting the activities in the statement of cash flows?

• Operating activities, financing activities, investing activities.
• Financing activities, investing activities, operating activities.
• Investing activities, financing activities, operating activities.
• Operating activities, investing activities, financing activities.

The purchase of an intangible asset is classified in the statement of cash flows as a(n):

• Financing activity.
• Noncash activity.
• Investing activity.
• Operating activity.

The net cash flows from operating, investing, and financing activities will equal:

• The change in cash reported in the balance sheet from this year versus last year.
• The change in stockholders' equity for the year.
• The ending balance of cash this year.
• Net income minus dividends for the year.

Depreciation expense is added to net income in the statement of cash flows under the indirect method because:

• Cash was paid.
• Depreciation expense reduced net income, but is a noncash item.
• Cash was received.
• Depreciation is tax deductible.

Which of the following best describes the indirect method of preparing the operating activities section of the statement of cash flows?

• Net income reconciled from accrual basis to cash basis.
• A list of cash inflows and cash outflows from transactions involving the purchase and sale of long-term assets and current investments.
• A list of cash inflows and cash outflows from transactions with lenders and stockholders.
• A list of cash inflows and cash outflows from transactions related to revenue and expense activities.