Managerial - Quarterly 2 Review

Which of the following would be classified under cash flows from investing activities on the statement of cash flows?

• Proceeds from issuing bonds

• Cash paid for purchasing equipment

• Cash received from customers

• Payments for interest on loans

The following information is available from the current period financial statements: Net income: $200,000 Depreciation expense: 35,000 Increase in inventory: 10,000 Decrease in accrued liabilities: 15,000 The net cash flow from operating activities using the indirect method is:

• $210,000

• $230,000

• $225,000

• $250,000

Rohan is starting a new business and is exploring different ways to raise funds. Which of the following activities would be considered a financing activity for his business?

• lending money

• acquiring investments

• issuing debt

• acquiring long-lived assets

A company sells a piece of machinery for $15,000 cash. This transaction should be shown on the statement of cash flows under:

• investing activities

• financing activities

• noncash investing and financing activities

• operating activities

Charlotte is reviewing the financial statements of her company. She wants to know what the last item on the statement of cash flows is:

• the change in cash

• cash at the end of the year

• net cash flow from investing activities

• net cash flow from financing activities

Where should cash paid for interest on debt be reported on the statement of cash flows?

• investing activities

• financing activities

• noncash investing and financing activities

• operating activities

A company issued $500,000 in common stock. How should this transaction be reported on the statement of cash flows?

• investing activities

• financing activities

• noncash investing and financing activities

• operating activities

Which of the following activities would result in an increase in cash flow and be shown on the statement of cash flows?

• payment of cash dividends

• purchase of equipment

• sale of common stock

• repayment of short-term loans

Which of the following activities would not be considered a cash outflow in the statement of cash flows?

• Repayment of long-term debt

• Acquisition of a new subsidiary

• Writing off an uncollectible account

• Issuance of bonds payable

Which of the following would be classified under cash flows from operating activities in a statement of cash flows?

• cash payments for dividends

• cash payments for purchasing equipment

• cash receipts from customers

• cash receipts from issuing bonds