Practice Problems and Keys Module $5$

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The three major classifications of activities if a cash flow statement are:

A$.$ inflows, outflows, and net flows.

B$.$ operating, investing, and financing.

C$.$ revenues, expenses, and net income.

The sale of a building for cash would be classified as what type of activity on the cash flow statement?

A$.$ Operating.

B$.$ Investing.

C$.$ Financing.

Under which section of a manufacturing company's cash flow statement are the following activities reported?

Item I: Purchases of securities held for trading

Item $2$: Sales of securities considered cash equivalents

A$.$ Both items are investing activities.

B$.$ Both items are operating activities.

C$.$ Only Item I is an investing activity.

Which of the following is an example of a financing activity on the cash flow statement under US GAAP?

A$.$ Payment of interest.

B$.$ Receipt of dividends.

C$.$ Payment of dividends.