1. Which is an example of a cash flow from an investing activity?

Receipt of cash from the sale of equipment

Payment of cash to suppliers for inventory

Payment of cash to repurchase outstanding capital stock

Receipt of cash from the issuance of bonds payable

2. Hanover, Inc. purchased land through the issuance of long-term bonds. How is this reported on the statement of cash flows?

Investing inflow

Financing outflow

Significant noncash investing and financing activity that merits disclosure

Operating activity

3. Under the indirect method of preparing the statement of cash flows, which of the following is added to net income in the operating activities section?

Decrease in accounts payable

Increase in accounts receivable

Gain on sale of equipment

Depreciation expense

4. In what section of the statement of cash flows will the issuance of bonds payable to acquire a building be reported?

Cash flows from financing activities

Noncash investing and financing activities

Cash flows from investing activities

Cash flows from operating activities

5. Which of the following items is reported in the operating activities section of a statement of cash flows prepared using the direct method?

Depreciation expense

Loss on sale of building

Cash payments to suppliers

Increase in accounts receivable

6. In horizontal analysis of a balance sheet, of what amount is each item expressed as a percentage?

Base-year amount

Current year total assets amount

Current year net income amount

Current year stockholders equity amount

7. The following schedule is a display of what type of analysis?

Amount Percent Current assets$200,00025%Property, plant, and equipment600,00075%Total assets$800,000100%

Ratio analysis

Vertical analysis

Horizontal analysis

Trend analysis

8. Ceradyne, Inc. presented the following data for a company:

Current liabilities$360Long-term debt480Common stock640Retained earnings520Total liabilities & stockholders equity$2,000

How would common stock appear on a common size balance sheet using vertical analysis?

32.0%

75.0%

Cannot be determined from the data given

55.1%