116. A company’s cash balance is reported in which two financial statements?
a. Income statement and statement of cash flows.
b. Balance sheet and statement of cash flows.
c. Income statement and balance sheet.
d. Balance sheet and statement of stockholders’ equity.
117. The statement of cash flows reports cash flows from the activities of:
a. Operating, purchasing, and investing.
b. Borrowing, paying, and investing.
c. Financing, investing, and operating.
d. Using, investing, and financing.
118. Operating cash flows would exclude:
a. Payment of employee salaries.
b. Receipt of cash from customers.
c. Payment of dividends.
d. Payment for advertising.
119. Cash flows from investing do
not
include cash flows from:
a. Lending.
b. The sale of equipment.
c. Borrowing.
d. The purchase of a building.
120. Which of the following is NOT correct regarding the reporting of cash?
a. Cash is reported in both the balance sheet and the statement of cash flows.
b. Cash flows from buying and selling investments and long-term productive assets are called operating cash flows.
c. Cash flows from transactions with stockholders and creditors are called financing cash flows.
d. Net cash flows reported in the statement of cash flows should equal the change in cash reported in the balance sheet.
121. Investing cash flows would include which of the following?
a. Payment of cash dividends to stockholders.
b. Purchase of office supplies with cash.
c. Purchase of a building with cash.
d. Cash sales to customers.
122. Payment of dividends to stockholders is considered a(n):
a. Operating cash flow.
b. Investing cash flow.
c. Financing cash flow.
d. Not a cash flow.
123. Providing services to customers on account is considered a(n):
a. Operating cash flow.
b. Investing cash flow.
c. Financing cash flow.
d. Not a cash flow.
124. Issuing common stock for cash is considered a(n):
a. Operating cash flow.
b. Investing cash flow.
c. Financing cash flow.
d. Not a cash flow.
125. Cash flows from financing activities include:
a. Lending.
b. Salaries paid.
c. The sale of land.
d. Dividends paid.
126. Cash flows from investing activities do
not
include:
a. Borrowing.
b. The purchase of equipment.
c. The sale of land.
d. The purchase of a building.
127. Terastar Corp. reports the following amounts for 2015 and 2016:
|
Net
Income
|
Operating Cash Flows
|
Investing Cash Flows
|
Financing
Cash Flows
|
2015
|
$10,000
|
$15,000
|
−$8,000
|
$10,000
|
2016
|
12,000
|
19,000
|
−$10,000
|
−6,000
|
What is the amount of Terastar’s free cash flows for 2016?
a. $3,000.
b. $13,000.
c. $9,000.
d. $7,000.
128. Terastar Corp. reports the following amounts for 2015 and 2016.
|
Net Income
|
Operating
|
Investing
|
Financing
|
2015
|
$10,000
|
$15,000
|
−$8,000
|
$10,000
|
2016
|
12,000
|
19,000
|
−$10,000
|
−6,000
|
What is the trend in free cash flows relative to net income?
a. Both are increasing.
b. Net income is trending upward and free cash flows are trending downward.
c. Both are decreasing.
d. Net income is trending downward and free cash flows are trending upward.