Which of the following would be considered a �use� of cash for by s6234U

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									Which of the following would be considered a “use” of cash for purposes of
constructing a statement of cash flows?
a. a. a decrease in accounts receivable.
b. b. an increase in accounts payable.
c. c. an increase in common stock.
d. d. a decrease in bonds payable.


Which of the following should be classified as a financing activity on a statement of
cash flows?
a. a. cash used to retire bonds payable.
b. b. an increase in deferred income taxes.
c. c. cash dividends received on an investment in stock.
d. d. both A and C above
e. e. none of the above


In the statement of cash flows, the sum total of the net cash provided by operating
activities, investing activities, and financing activities would be equal to:
a. a. zero.
b. b. the beginning balance of cash and cash equivalents.
c. c. the ending balance of cash and cash equivalents.
d. d. the increase or decrease in cash and cash equivalents.


An increase in the taxes payable account of $1,000 over the course of a year would
be shown on the company's statement of cash flows prepared under the indirect
method as:
a. a. an addition to net income of $1,000 in order to arrive at net cash provided by
operating activities.
b. b. a deduction from net income of $1,000 in order to arrive at net cash provided by
operating activities.
c. c. an addition of $1,000 under financing activities.
d. d. a deduction of $1,000 under financing activities.


Which of the following should be classified as an investing activity on a statement of
cash flows?
a. a. cash paid for income taxes.
b. b. cash paid for dividends to stockholders.
c. c. cash paid to employees for services rendered.
d. d. none of the above
A decrease in the plant and equipment account of $100,000 over the course of a year
would be shown on the company's statement of cash flows prepared under the
indirect method as:
a. a. an addition to net income of $100,000 in order to arrive at net cash provided by
operating activities.
b. b. a deduction from net income of $100,000 in order to arrive at net cash provided by
operating activities.
c. c. an addition of $100,000 under investing activities.
d. d. a deduction of $100,000 under investing activities.


Which of the following would be considered a “source” of cash for purposes of
constructing a statement of cash flows?
a. a. an increase in accounts payable.
b. b. dividends paid to the company's own shareholders.
c. c. a decrease in accrued liabilities.
d. d. an increase in accounts receivable.


Dividends paid to a company's own stockholders of $80,000 would be shown on the
company's statement of cash flows prepared under the indirect method as:
a. a. an addition of $80,000 under investing activities.
b. b. a deduction of $80,000 under investing activities.
c. c. an addition of $80,000 under financing activities.
d. d. a deduction of $80,000 under financing activities.


Under the indirect method, which item would be deducted from net income as part
of the process of arriving at cash provided by operating activities on the statement
of cash flows?
a. a. Patent amortization expense
b. b. Increase in accounts payable
c. c. Increase in prepaid expenses
d. d. Decrease in accounts receivable

								
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