3. a) b) Cash flows from operating activities include: Proceeds from stock issuance Paying principal to lenders c) Purchases of equipment d) Changes in accounts receivable e) None of the above. 4. Which of the following circumstances would require a contingent liability to be recorded under generally accepted accounting principles? a) The liability is probable and estimable. b) The liability is remote. c) The liability is possible. d) The liability is probable and not estimable. e) None of the above. 5. Fixed assets are and are found on the a) Long-lived intangible assets; balance sheet. b) Long-lived tangible assets; income statement. c) Current tangible assets; balance sheet. d) Current intangible assets; income statement. e) None of the above Donating an old piece of equipment to charity. 6. Which of the following would be reported as a cash outflow from investing activities: a) b) Repaying the principal of a bond. c) Buying another company's bonds with cash. d) Acquiring an investment security by issuing company stock. e) None of the above 7. Which of the following statements about capitalizing costs is correct? a) Capitalizing costs refers to the process of converting assets to expenses. b) All costs incurred by a company are capitalized. c) Capitalizing a cost means to record it as an asset. d) Capitalizing costs results in an immediate decrease in net income. e) None of the above