ACC 201 Ch 11 Quiz

Cash flows from acquiring and disposing of long-term assets are classified as

a. investing activities.

Cash flows from issuing and repurchasing stock or issuing and repaying debt are classified as

b. financing activities.

When using the indirect method to determine operating cash flows, how is the purchase of equipment for cash shown on the Statement of Cash Flows?

e. investing activity

A company reported net income for the current year. Which of the following business transactions would cause its cash from operating activities to be higher than its net income?

a. Depreciation expense was recorded for the year.

When using the direct method to determine operating cash flows, how is the retirement of bonds payable at their maturity date shown on the Statement of Cash Flows?

a. financing activity

Which of the following is not an investing activity?

b. Sale of merchandise for cash.

Which method of preparing the operating activities section was used?

b. The indirect method.

When using the indirect method to determine operating cash flows, how is the issuing of stock for cash shown on the Statement of Cash Flows?

b. financing activity

Which of the following is not an operating activity?

c. Cash payments for dividends to stockholders.

When using the direct method to determine operating cash flows, how is the payment of a cash dividend shown on the Statement of Cash Flows?

c. financing activity

When using the indirect method to determine operating cash flows, how is the issuance of stock to retire a long-term debt shown on a statement of cash flows?

c. noncash investing or financing activity

Cash flows from acquiring and selling products are classified as

c. operating activities.

Which balance sheet accounts are most affected by operating activities?

d. Current assets and current liabilities.

A company reported net income of $150,000 for the current year, but its cash balance decreased by $40,000. Which financial statement should management refer to for an explanation of this situation?

d. Statement of Cash Flows

When using the direct method to determine operating cash flows, how is the collection of cash from customers shown on the Statement of Cash Flows?

e. operating activity