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21) Nelson Corp. uses the indirect method to prepare the statement of cash flows. Refer to the following section of the comparative balance sheet:

Nelson Corp.

Comparative Balance Sheet

December 31, 2014 and 2013

2014

2013

Increase/decrease

Accounts Payable

$8,000

$9,000

$(1,000)

Accrued Liabilities

3,000

1,500

1,500

Long-Term Notes Payable

56,000

60,000

(4,000)

Total liabilities

$67,000

$70,500

$(3,500)

The change in Accounts Payable will be shown as a negative cash flow in the adjustments to Net Income.

22) Nelson Corp. uses the indirect method to prepare the statement of cash flows. Refer to the following section of the comparative balance sheet:

Nelson Corp.

Comparative Balance Sheet

December 31, 2014 and 2013

2014

2013

Increase/decrease

Accounts Payable

$8,000

$9,000

$(1,000)

Accrued Liabilities

3,000

1,500

1,500

Long-Term Notes Payable

56,000

60,000

(4,000)

Total liabilities

$67,000

$70,500

$(3,500)

The change in Accrued Liabilities will be shown as a negative cash flow in the adjustments to Net Income.

23) Which of the following is the typical order of the sections on a statement of cash flows?

A) operating, financing, investing

B) financing, investing, operating

C) investing, operating, financing

D) operating, investing, financing

24) The three major categories included on the statement of cash flows are ________.

A) investing, operating, and financing activities

B) investing, capital, and financing activities

C) investing, operating, and contracting activities

D) financial, operating, and internal control activities

25) The activities that are included in the operating activities section of the statement of cash flows are ________.

A) activities that obtain the cash needed to launch and sustain the business

B) activities that create revenue or expenses

C) activities that increase or decrease long-term assets

D) activities that pertain to construction of new facilities

26) Which of the following sections of the statement of cash flows includes activities that create revenue and expenses of the business?

A) the investing section

B) the financing section

C) the operating section

D) the non-cash investing and financing section

27) Which of the following sections of the statement of cash flows includes activities that affect net income on the income statement? (Assume the indirect method is used.)

A) the financing section

B) the operating section

C) the investing section

D) the non-cash investing and financing section

28) Which of the following sections of the statement of cash flows includes activities that affect current assets and current liabilities on the balance sheet? (Assume the indirect method is used.)

A) the investing section

B) the financing section

C) the operating section

D) the non-cash investing and financing section

29) Which of the following sections of the statement of cash flows includes activities that increase and decrease long-term assets?

A) the financing section

B) the operating section

C) the investing section

D) the non-cash investing and financing section

30) Which of the following sections of the statement of cash flows includes purchases and sales of long-term assets?

A) the financing section

B) the operating section

C) the investing section

D) the non-cash investing and financing section

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