Multiple Choice Questions
1.How will a company classify ‘proceeds received from the issuance of long-term bonds’ on its statement of cash flows?
a. Cash provided from operations
b. Cash used in operations
c. Cash provided from investing activities
d. Cash provided from financing activities
2.How will a company classify the exchange of common stock for land on its statement of cash flows?
a. An operating activity
b.An investing activity
c.A financing activity
d. A footnote
3.How will a company classify money paid for the acquisition of land on its statement of cash flows?
a. Cash provided from operations
b. Cash used in financing activities
c. Cash provided from investing activities
d. Cash used for investing activities
Equipment that cost $10,000 that had a book value of $6,000 was sold for $7,000. Data from the comparative balance sheets are:
|
12/31/09
|
12/31/08
|
Equipment
|
$420,000
|
$310,000
|
Accumulated Depreciation
|
59,000
|
36,000
|
Equipment purchased during 2009 cost
a. $120,000.
b. $110,000.
c. $145,000.
d. $10,000.
5.If an investor is interested in the solvency of a company, he/she should analyze the
a.balance sheet and income statement.
b.income statement, balance sheet, and statement of cash flows.
c.balance sheet and statement of cash flows.
d.statement of cash flows only.
6.How will a company classify the sale of treasury stock at an amount equal to its cost on its statement of cash flows?
a. Operating activity
b. Investing activity
c. Extraordinary activity
d.Financing activity
7.How will a company classify money paid to suppliers on its statement of cash flows?
a. Cash provided from operations
b. Cash used in operations
c. Cash provided from investing activities
d. Cash used in financing activities
8.Payments for purchases of property, plant, and equipment and other productive assets are classified as cash outflows from
a. operating activities.
b. financing activities.
c. investing activities.
d. selling activities.
9.How will a company classify money paid for inventory acquisitions on its statement of cash flows?
a. Cash provided from operations
b. Cash used in operations
c. Cash provided from investing activities
d. Cash used for investing activities
10.How will a company classify money received from selling equipment no longer used in operations on its statement of cash flows?
a. Cash provided from operations
b. Cash provided from financing activities
c. Cash provided from investing activities
d. Cash used for investing activities