1- Investing activities do not include the:

Multiple Choice

Purchase of plant assets.

Lending and collecting on notes receivable.

Issuance of common stock.

Sale of plant assets.

Sale of short-term investments other than cash equivalents.

2- When preparing a statement of cash flows using the indirect method, each of the following should be classified as an operating cash flow except:

Multiple Choice

An increase in accounts receivable.

A decrease in accounts payable.

Proceeds from the disposal of a long-term asset with no gain or loss.

An increase in prepaid expenses.

A decrease in accrued expenses payable.

3- An example of a transaction that must be disclosed as a noncash investing and financing activity includes all but which of the following?

Multiple Choice

The retirement of debt by issuing equity stock.

A transaction exchanging cash equivalents for cash.

The leasing of assets in a transaction that qualifies as a capital lease.

The purchase of noncash assets in exchange for equity or debt securities.

The purchase of long-term assets financed by a cash down payment and a note payable to the seller for the balance.

4- Cash flows from selling trading securities are usually reported in the statement of cash flows as part of:

Multiple Choice

Operating activities.

Financing activities.

Investing activities.

Noncash activities.

This is not reported in the statement of cash flows.

5- Which of the following transactions or events should be reported as a source of cash from operating activities when using the direct method?

Multiple Choice

Credit sales.

Cash collections from customers.

Depreciation expense.

Cash received from the sale of a building.

Cash received from the sale of treasury stock.