21.Which one of the following is consistent with a company recording a large operating loss but still having healthy cash flows from operations?
a.A large amount of depreciation and/or amortization expense
b.An increase in accounts receivable and inventory
c.A decrease in accounts payable
d.All sales are on a cash basis.
22.Which one of the following is consistent with a company recording a large operating income but having a net cash outflow from operations?
a.A great amount of depreciation expense
b.An increase in accounts receivable and inventory
c.An increase in accounts payable
d.Acquisition of new plant assets for cash
23.Which one of the following is added to net income in determining cash flows from operations?
a.Decrease in amounts paid to reduce long-term notes
b.Decrease in accounts payable
c.Depreciation or amortization
d.Cash received from selling treasury stock
24.Which one of the following is added to net income in determining cash flows from operations?
a.Amortization of intangibles
b.Decrease in accounts payable
c.Increase in accounts receivable
d.A gain on the sale of plant assets
25.Which one of the following is added to net income in determining cash flows from operations?
a.Cash dividends paid
b.Increase in accounts payable and decrease in accounts receivable
c.Decrease in accounts receivable and cash dividends declared
d.Increase in prepaid expenses
26.Which one of the following is added to net income in determining cash flows from operations?
a.Increase in inventory
b.Decrease in wages payable
c.Loss from sale of land
d.Gain from selling treasury stock above its original cost
27.Which one of the following is subtracted from net income in determining cash flows from operations?
a.Loss from sale of land
b.Depreciation expense
c.Stock dividends declared and distributed
d.Gain from sale of equipment
28.Which one of the following is subtracted from net income in determining cash flows from operations?
a.Increase in prepaid insurance
b.Increase in accounts payable
c. Decrease in accounts receivable
d. Decrease in prepaid insurance
29.The primary purpose of the statement of cash flows is to provide information
a. about the revenue and expenses of an entity’s operations during a period.
b. that predicts future cash flows.
c. about the operating, investing, and financing activities of an entity during a period.
d. about the entity's ability to meet its obligations, its ability to pay dividends, and its needs for external financing.
30.An increase in inventory is reported in a statement of cash flows using the indirect method as a(n)
a. addition to net income in arriving at net cash flows from operating activities.
b. deduction from net income in arriving at net cash flows from operating activities.
c. cash outflow from investing activities.
d. cash outflow from financing activities.