1-

When a company uses the direct method to present the statement of cash flows, the payment of cash dividends reduces the amount of net cash provided by operating activities.

True

False

2-

All of the following would be done when calculating the change in cash from operating activities under the indirect method except

deduct the purchase of equipment.

add an increase in accrued interest payable.

add a decrease in merchandise inventory.

deduct a decrease in accounts payable.

3-

Financing activities include transactions that affect long-term liabilities and stockholder's equity on the balance sheet.

True

False

4-

Using the direct method of cash flow, which of the following is a category in the statement of cash flows?

Amortization expense

Loss on sale of equipment

Collections from customers

Net income

5-

On the statement of cash flows, which of the following would be considered an investing activity?

A purchase of treasury stock

A sale of land

Depreciation of equipment

A sale of inventory

6-

The purchase of inventory would be considered a

		cash outflow from investing activities.
		cash outflow from operating activities.
		cash outflow from financing activities.
		cash outflow from depreciation.