Which of the following statements is true of a decrease in inventory?

a.It is included in cost of goods sold.

b.It decreases the cash from investing activities.

c.It decreases operating cash flows.

d.It represents a cash outflow.

Which of the following will be included in operating cash flows under the direct method?

a.Depreciation

b.Cash paid to suppliers

c.A gain on sale of equipment

d.Adjustment for foreign exchange fluctuations

The financial statements of Beige Inc. shows a beginning balance of accounts receivable of $5,000 and a closing balance of accounts receivable of $8,000. Which of the following can be inferred from this observation?

a.Neither were revenues recognized on the income statement, nor was cash collected.

b.Revenues were recognized on the income statement, but cash was not collected.

c.The difference between the opening and closing balance of accounts receivable is received in cash.

d.Total revenues and total cash inflow are equal.

Which of the following statements is true of the activity format followed in preparing the statement of cash flows?

a.It is the classification of cash flows as revenue generating or new product development expenses.

b.It is the classification of cash flows as operating, investing, and financing cash flows.

c.It is the format of presenting only those activities that increase cash and are sources of cash.

d.It is the format of presenting only those activities that decrease cash and are uses of cash.