Cash paid to owners for dividends$1,000
Cash received from customers from prior credit sales8,600
Cash paid for long-term assets3,300
Cash paid for income taxes2,700
What are the cash flows from operations under the direct method?
a.$11,300
b.$ 5,900
c.$ 5,300
d.$ 2,600
12.Activities that involve the production or delivery of goods for sale or the providing of services for sale should be listed under which classification on a statement of cash flows?
a.financing activities
b.operating activities
c.refunding activities
d.investing activities
13.Which of the following is an investing activity?
a.sale of equipment
b.payment of cash dividends
c.payment of interest
d.purchase of inventory
14.Which one of the following is a financing activity?
a.sale of worn out factory equipment
b.sale of inventory
c.collection of an account receivable
d.sale of bonds payable
15.Which of the following is an operating activity?
a.sale of long-term fixed assets
b.payment of dividends to owners
c.sale of inventory
d.purchase of new factory building
16.What type of activity is the paying off of a bank loan?
a.operating
b.financing
c.investing
d.operating if it was a short-term loan; financing if it was a long-term loan
17.A statement of cash flows has been prepared. The sum of the three major components (operating activities, investing activities, financing activities) will add up to an amount equal to
a.the ending cash balance reported on the balance sheet
b.net income for the period on the accrual basis
c.the ending amount of working capital
d.the net change in the cash account during the year
18.Which of the following is properly classified on a statement of cash flows as an operating activity?
Payment of Interest Payment of dividends
on a bank loan to shareholders
a.Yes Yes
b.Yes No
c.No Yes
d.No No
19.Which of the following is an operating activity?
a.payment of interest on a loan
b.payment of dividends on common stock
c.sale of fully depreciated assets previously used in operations
d.purchase of new fixed assets to be used in operations
20.Sales on account for the year totaled $200,000. The following information is also available from the accounting system:
Accounts Receivable Balances
Beginning of year $30,000
End of year 25,000
What amount of cash was collected from customers during the year?
a.$200,000
b.$195,000
c.$205,000
d.$170,000