Accounting 5.2
Which of the following statements is false?
B) The statement of cash flows is similar to the income statement, as they both determine the net income for a company.
Cash payments to suppliers would appear on a statement of cash flows using the direct method as a(n)
B) operating activity.
Companies with divisions outside the United States
C) show the effect of exchange rate differences on their Statement of Cash Flows.
The issuance of stock for cash would be classified as a(n)
E) financing activity on the statement of cash flows.
All of the following would be included in a company's financing activities except
E) interest payments.
A transaction in which long-term debt of $50,000 is converted to common stock would be reported in the financing section of the cash flow statement.
FALSE
Cash dividends paid to stockholders are an operating activity on the statement of cash flows.
FALSE
Cash received from customers is a financing activity on the statement of cash flows.
FALSE
Dividends received from a subsidiary would be classified as an investing activity on a statement of cash flows.
FALSE
Investing activities involve obtaining resources as a borrower and repaying creditors.
FALSE
Issuing equity securities is an operating activity on the statement of cash flows.
FALSE
Operating activities on a statement of cash flows relate to acquiring assets such as buildings and equipment.
FALSE
The issuance of long-term debt results in a cash outflow as reported in the financing section.
FALSE
Cash flows from financing activities include borrowing cash through a lender.
TRUE
Cash flows from operating activities include the receipt of interest income.
TRUE
The purchase of another company's stock is an example of an investing activity.
TRUE
The receipt of loan repayments is an investing activity on the statement of cash flows.
TRUE
Activities or transactions that affect the income statement are primarily included in which section of the statement of cash flows?
A) Operating
All of the following would be included in a company's operating activities except
A) dividend payments.
All of the following would be included in a company's financing activities except
A) receipt of dividends.
All of the following would be included in a company's investing activities except
A) taking out a loan from the bank.
Which of the following would appear in the financing activities section of a statement of cash flows?
B) Cash payment of dividends
Activities that involve (1) providing and collecting cash as a lender and (2) acquiring and disposing of fixed assets are included in which section of the statement of cash flows?
B) Investing
All of the following would be included in a company's investing activities except
B) payment of dividends.
Which of the following would be classified as an operating activity on a statement of cash flows?
C) Collections from customers
Activities that involve obtaining resources as a borrower or issuer of securities and repaying creditors and owners are included in which section of the statement of cash flows?
C) Financing
The issuance of a long-term debt for cash would appear on the statement of cash flows as a(n)
C) financing activity.
All of the following activities would be included in a company's operating activities on a statement of cash flows except
D) payment to the bank to reduce loan balance.
Which of the following would be classified as an operating activity on a statement of cash flows?
E) Purchase of inventory for cash
Cash flows from financing activities include the payment of interest on a note payable.
FALSE