. Which of the following would be classified as a cash outflow for investing activities? payment of accounts payable cash paid for acquisition of property, plant, and equipment sale of available-for-sale securities payment of dividends 2. Paying the salaries of employees would be classified as an operating activity. an investing activity. a financing activity. a noncash investing and financing activity. 3. The payment of dividends would be classified as an operating activity. an investing activity. a financing activity. a noncash investing and financing activity.
1. Which of the following would be classified as a
- payment of accounts payable
- cash paid for acquisition of property, plant, and equipment
- sale of available-for-sale securities
- payment of dividends
2. Paying the salaries of employees would be classified as
- an operating activity.
- an investing activity.
- a financing activity.
- a noncash investing and financing activity.
3. The payment of dividends would be classified as
- an operating activity.
- an investing activity.
- a financing activity.
- a noncash investing and financing activity.
1. The indirect method of presenting cash flows from operating activities begins with
- a listing of the inflows of cash from operating activities.
- a listing of the outflows of cash for operating activities.
- the balance in the Cash account.
- net income.
2. The direct method of presenting cash flows from operating activities begins with
- a listing of the inflows of cash from operating activities.
- a listing of the outflows of cash for operating activities.
- the balance in the Cash account.
- net income.
3. In the adjustments to convert net income to net cash flow from operating activities, which of the following would be added to net income?
- A decrease in
accounts receivable . - An increase in accounts payable.
- Depreciation expense.
- All of these choices.
1. Which of the following statements are needed for analysis when preparing the statement of cash flows?
- beginning and ending balance sheets
- income statement
- shareholders' equity or
retained earnings statement - all of these choices
2. Step 2 of the visual inspection method of preparing the statement of cash flows reads: For each ________________ item, determine the increase or decrease and whether it caused an inflow or outflow of cash. If so, report it in the appropriate category.
- balance sheet
- income statement
- shareholders' equity or retained earnings statement
trial balance
1. Using a spreadsheet with the indirect method, entry (a) records net income as the first item on the spreadsheet in the Operating Activities section, with the corresponding entry as a
- debit to Retained Earnings.
- credit to Retained Earnings.
- credit to Income Summary.
- debit to Cash.
2. As you complete the spreadsheet to account for all the changes in the noncash accounts that occurred during the current period, you are
- constructing entries that will need to be journalized and posted when the spreadsheet is complete.
- reconstructing the
journal entries that caused the changes in the noncash accounts. - undoing the journal entries that caused the changes in the noncash accounts.
- doing none of these choices.
1. If
- the investing activities section only.
- the financing activities section only.
- both the operating activities and the investing activities sections.
- both the operating activities and financing activities sections.
2. Which of the following is true if a company reports an unrealized increase in fair value of available-for-sale securities using an allowance account?
- The spreadsheet and statement of cash flows do not reflect this transaction.
- The spreadsheet accounts for this transaction, but it is not reflected in the statement of cash flows.
- The spreadsheet does not account for this transaction, but it is reflected in the statement of cash flows.
- Both the spreadsheet and the statement of cash flows reflect this transaction.
1. Using the direct method rather than the indirect method of preparing the statement of cash flows will cause
- the operating activities section to be structured differently.
- the investing activities section to be structured differently.
- the financing activities section to be structured differently.
- all sections of the statement of cash flows to be structured differently.
2. Using the direct method, the first item usually reported in the operating activities section of the statement of cash flows is
- net income.
- net change in
cash. - cash inflows from collections from customers.
- none of these choices.
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