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Question : 12.2  Distinguish among operating, investing, and financing cash flows 1) The

12.2  Distinguish among operating, investing, and financing cash flows

1) The most important section of a cash flow statement is the:

A) operating activities

B) investing activities

C) financing activities

D) all of the sections are equally important

2) Which of the following activities increase and decrease the long-term assets available to a company?

A) operating activities

B) investing activities

C) financing activities

D) warehousing activities

3) Which of the following represents the correct order on the statement of cash flows?

A) Investing, operating and then financing activities

B) Operating, investment then financing activities

C) Operating, financing then investing activities

D) Investing, financing then operating activities

4) The issuance of bonds for cash would be reported on a cash flow statement under the:

A) operating activities

B) investing activities

C) financing activities

D) no activities because issuing bonds for cash would not be reported on a cash flow statement

5) After a business is up and running, information about which of the following business activities is most important?

A) operating activities

B) investing activities

C) financing activities

D) warehousing activities

6) Which of the following activities creates revenues and expenses in a company's major line of business?

A) operating activities

B) investing activities

C) financing activities

D) warehousing activities

7) The payment of principal amounts (excluding interest) to creditors would be reported on a cash flow statement under the:

A) operating activities

B) investing activities

C) financing activities

D) either investing activities or financing activities

8) The issuance of common shares for cash would be reported on a cash flow statement under:

A) the operating activities

B) the investing activities

C) the financing activities

D) either investing activities or operating activities

9) Which of the following is a method for reporting cash flows from operating activities that begins with net income and reconciles to cash flows from operating activities?

A) cash-basis method

B) direct method

C) accrual method

D) indirect method

10) Which of the following is not an example of an operating activity?

A) dividends declared

B) dividend income

C) interest income

D) int


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