TCCB

There are four parts to the Statement of Cash Flows (or Cash Flow Statement): ......

• Operating Activities , Investing Activities, Financing Activities, Supplemental Disclosures

• Operating Activities , Investing Activities, Financing Activities,

• Operating Activities , Investing Activities, Supplemental Disclosures

A negative effect could also be thought of as a use of cash, a decrease in cash, or a negative amount on the cash flow statement:

I. An increase in the balance of Prepaid Insurance

II. A decrease in Accounts Payable

III. An increase in the current liability Income Taxes Payable

• I and II

• II and III

• I and III

• Both I and II and III

For a recent year a corporation's financial statements reported the following:

Based on the above information, what amount will the corporation report as Net Cash Provided by Operating Activities on the cash flow statement?

• $65,000

• $125,000

• $155,000

Current Asset Account Reduced Prepaid Insurance Is Operating Cash Flow?

• TRUE

• FALSE

Which of the following statements is true?

• A) For an entity to survive, the net cash flow from operating activities should be negative.

• B) For an entity to survive, the net cash flow from investing activities should be positive.

• C) For an entity to survive, the net cash flow from financing activities should be positive.

• D) For an entity to survive, the net cash flow from operating activities should be positive.

Which of the following items would not appear in a statement of cash flows?

• A) Depreciation expense.

• B) Lease payments.

• C) Dividends received.

• D) Payment of wages.

A business purchases equipment worth $50 000 to be used in their manufacturing process.This transaction would be classified as which type of activity in the statement of cash flows?

• A) Financing.

• B) Non-cash.

• C) Operating.

• D) Investing.

How are cash proceeds from issuing debentures, loans, notes, or bonds, classified in the cash flow statement?

• Operating

• Investing

• Financing

Which of the following statements is true about cash flow and profit?

A. A business can be profitable but still have a negative cash flow

B.If the profit margin is small, it is more important to control working capital

C.Profit is the biggest element of cash flow

D. Capital expenditure needs to be matched by new loans to avoid affecting cash flow.

• A and B

• A , B and C

• A , B and D

• B , C and D

Identify the cash flow classification for the following item:

1. Accounts receivable are collected?

2. Sales are made for cash?

3. Payment of electricity expenses?

• Operating

• Investing

• Financing