1. The purpose of a cash flow statement is to

a) Show the profits generated

b) Show how cash was generated and used during a period

c) Show the expenses incurred in doing business

d) Show the revenue earned

2. Probably the most important indicator of financial health is the net cash flow from

a) Operating activities

b) Investing activities

c) Financing activities

d) Buying and selling activities

3. An example of a cash outflow from financing activities is

a) Cash dividends paid

b) Interest paid on notes payable

c) Payment for additional inventory

d) Buying debt and equity securities

4. An example of a cash inflow from investing activities is

a) Interest received on loans

b) The purchase of plant and equipment

c) The sale of investments in equity securities

d) The issuance of stock

5. An example of a cash outflow from investing activities is

a) Issuance of a notes payable

b) Making a loan to another company

c) Cash dividends paid

d) The purchase of treasury stock

Answer rating: 100% (QA)

1 b Show how cash was generated and us... View the full answer