1. The difference between the direct method and the indirect methods of preparing the statement of cash flows is primarily visible in which of the following sections?

Select one:

a. Operating activities section only

b. Investing activities section only

c. Both operating and investing activities

d. Both investing and financing activities

2.

Which of the following items would not be classified as either cash or a cash equivalent for purposes of the statement of cash flows?

Select one:

a. Money market account funds.

b. Treasury bill that matures in three months.

c. Treasury bill that matures in three years.

d. Checking account funds.

3.

When using the indirect method of preparing a statement of cash flows, which of the following items would need to be deducted from net income in order to reconcile to cash provided by operating activities?

Select one:

a. Increase in accounts payable

b. Increase in accounts receivable

c. Depreciation expense

d. Increase in property, plant, and equipment