2

The statement of cash flows is:

Multiple Choice

• Another name for the statement of financial position.

• A financial statement that presents information about changes in equity during a period.

• A financial statement that reports the cash inflows and cash outflows for an accounting period, and that classifies those cash flows as operating activities, investing activities, or financing activities.

• A financial statement that lists the types and amounts of assets, liabilities, and equity of a business on a specific date.

• A financial statement that lists the types and amounts of the revenues and expenses of a business for an accounting period.

3

A cash equivalent is:

Multiple Choice

• An investment readily convertible to a known amount of cash.

• Close to its maturity date but its market value may still be affected by interest rate changes.

• Generally within 12 months of its maturity date.

• Is not considered highly liquid.

• Another name for cash.

4

Activities that involve the production or purchase of merchandise and the sale of goods and services to customers, including expenditures related to administering the business, are classified as:

Multiple Choice

• Financing activities.

• Investing activities.

• Operating activities.

• Direct activities.

• Indirect activities.

5

The appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is:

Multiple Choice

• Operating activities.

• Financing activities.

• Investing activities.

• Schedule of noncash investing or financing activity.

• This is not reported on the statement of cash flows.

6

Which of the following items is reported on the statement of cash flows under financing activities?

Multiple Choice

• Declaration of a cash dividend.

• Payment of a cash dividend.

• Declaration of a stock dividend.

• Payment of a stock dividend.

• Stock split.

7

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.

9.

The appropriate section in the statement of cash flows for reporting the cash payment of wages is:

Multiple Choice

• Operating activities.

• Financing activities.

• Investing activities.

• Schedule of noncash investing or financing activity.

• This is not reported on the statement of cash flows.

10.

A company's transactions with its creditors to borrow money and/or to repay the principal amounts of both short- and long-term debt are reported as cash flows from:

Multiple Choice

• Operating activities.

• Investing activities.

• Financing activities.

• Direct activities.

• Indirect activities.