Question: 1) The operating activities section of the cash flow statement must be converted from an accrual basis to a cash basis under: the direct method
1)
The operating activities section of the cash flow statement must be converted from an accrual basis to a cash basis under:
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| the direct method only. |
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| the indirect method only. |
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| both the direct and indirect methods. |
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| neither the direct nor indirect method. |
2)
If the balance in a companys equipment account increased $25,000 during the year and additional information shows that the company purchased $30,000 worth of equipment and disposed of equipment costing $5,000 for proceeds of $3,000, which of the following amounts should be reported in the investing section of the cash flow statement?
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| Outflow of cash of $27,000 |
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| Outflow of cash of $30,000 and an inflow of $5,000 |
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| Outflow of cash of $30,000 and an inflow of $3,000 |
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| Outflow of cash of $25,000 |
3)
If a companys retained earnings increased $120,000 and its profit was $140,000, the financing activities section of the cash flow statement would show:
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| a cash inflow of $140,000 and a cash outflow of $20,000. |
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| a cash inflow of $20,000 and an outflow of $140,000. |
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| a cash inflow of $120,000. |
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| a cash outflow of $20,000.
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4)
Free cash flow is calculated as:
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| cash provided (used) by operating activities less cash used (provided) by investing activities. |
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| cash provided (used) by operating activities plus operating activities and dividends declared. |
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| net change in cash for the period less cash used (provided) by investing activities. |
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| net cash provided (used) by investing activities less operating activities and dividends paid. |
5)
Free cash flow is calculated as:
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| cash provided (used) by operating activities less cash used (provided) by investing activities. |
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| cash provided (used) by operating activities plus operating activities and dividends declared. |
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| net change in cash for the period less cash used (provided) by investing activities. |
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| net cash provided (used) by investing activities less operating activities and dividends paid. |
6)
If there is a net decrease in cash we say that cash was
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| used by that activity. |
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| absorbed by that activity. |
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| provided by that activity. |
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| generated by that activity. |
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