12.2 Learning Objective 2
1) Most of the time, net income will be the same as net cash provided by operating activities.
2) The statement of cash flows classifies cash receipts and payments as operating, investing, and financing activities.
3) Of the three types of business activities reported on a statement of cash flows, investing activities are the most important when evaluating a business.
4) The sale of land for cash would be classified as a cash inflow from an operating activity on the statement of cash flows.
5) The Net Cash Provided by Financing Activities is the most important category on the statement of cash flows because it generates the most cash for most companies.
6) The cash payment of interest on bonds payable is a cash outflow from operating activities on the statement of cash flows.
7) Collections on a loan are reported as investing activities on the statement of cash flows.
8) There are two ways to format operating activities on the statement of cash flows.
9) The three types of activities reported on the statement of cash flows are:
A) operating, investments, and financing.
B) operating, investing, and free flow.
C) operating, investing, and financing.
D) operating, indirect, and direct.
10) The three types of activities reported on the statement of cash flows are presented in the following order:
A) operating, investing, and financing.
B) financing, operating, and investing.
C) investing, operating, and financing.
D) financing, investing, and operating.