11) Which would NOT be subtracted from net income in the operating section of an indirect cash flow statement?
A) An increase in prepaid expenses
B) An increase in accounts payable
C) A decrease in accounts payable
D) An increase in notes receivable
E) An decrease in inventory
12) Which would be subtracted from net income in the operating section of an indirect cash flow statement?
A) An increase in notes payable
B) A decrease in prepaid expenses
C) An increase in sales tax payable
D) An increase in inventory
E) A decrease in accounts receivable
13) An example of a cash inflow from financing activities is:
A) collecting money owed by customers.
B) issuing preferred shares.
C) selling a piece of equipment.
D) paying off a bond.
E) an increase in accounts payable.
14) An example of a cash outflow from financing activities is:
A) paying dividends in cash.
B) buying additional inventory.
C) selling land.
D) collecting notes receivable.
E) loss on the sale of vehicle.
15) Which of the following is NOT a source of cash?
A) An increase in accounts payable
B) A decrease in accounts receivable
C) A decrease in notes payable
D) The sale of common shares
E) Collecting notes receivable
16) Under the indirect method of cash flow, which of the following adjustments would NOT be made to net income when computing cash from operating activities?
A) Adding an increase in accounts payable
B) Adding depreciation expense
C) Adding a decrease in accounts payable
D) Subtracting the gain on sale of land
E) Proceeds from the sale of a long-lived asset
17) Under the indirect method, which of the following is NOT a proper adjustment to net income under operating activities?
A) Adding a decrease in inventory
B) Subtracting an increase in salaries payable
C) Deducting an increase in prepaid expenses
D) Subtracting a gain on the sale of equipment
E) Adding a decrease in accounts receivable
18) Of the following, which is NOT classified as an investing activity on the cash flow statement?
A) Sale of equipment for cash
B) Purchasing land
C) Collecting the principal on loans
D) Selling goods and services
E) Buying computer equipment
19) A cash flow statement would NOT disclose:
A) stock dividends declared.
B) bonds payable issued.
C) purchase of treasury shares.
D) capital shares issued.
E) payment of dividends.
20) Business transactions that do NOT involve the payment or receipt of cash are considered to be __________ transactions.