79.Current period depreciation expense is listed:
A. on the balance sheet.
B. in the investment section of the cash flow statement.
C. on the income statement.
D. on neither the balance sheet nor the income statement; it is a noncash expense.
80.Which of the following is not a typical reason for differences between profit and cash flow?
A. Depreciation expense
B. Income taxes
C. Changing levels of accounts receivable
D. Accrual accounting practices
81.Which of the following best explains the combination of a high level of sales combined with a low cash flow during an accounting period?
A. High depreciation expense
B. Reduction of inventory levels
C. Acquisition of equipment
D. Increase in accounts payable
82.If a firm generates $2,000 in sales and has a $500 increase in accounts receivable during an accounting period, based on these two categories cash flow will increase by:
A. $2,500.
B. $2,000.
C. $1,500.
D. $500.
83.Which of the following statements is more likely if cash and marketable securities increase by $5,000 during a period in which cash provided by operations increases by $1,000 and cash used by investments decreases by $500?
A. Cash provided by financing increases by $3,500.
B. Cash used by financing decreases by $1,000.
C. Debt increases by more than cash dividends paid.
D. Debt is reduced by more than cash dividends paid.
84.If a firm’s net income is positive and its noncash expenses are positive, which of the following could account for a negative amount of cash provided by operations?
A. Current assets decrease more than current liabilities decrease.
B. Current assets increase more than current liabilities increase.
C. Current assets decrease more than current liabilities increase.
D. A large addition is made to plant and equipment.
85.What is the most likely conclusion for a firm whose statement of cash flows shows an increase in cash balances and has negative cash flows from both operations and financing?
A. The firm has low depreciation expense.
B. The firm did not pay any dividends.
C. The firm sold more equipment than it purchased.
D. The firm has a low interest rate on its debt.
86.What happens when moving from net income to cash flows as the result of an increase in inventory balances?
A. Cash flows increase.
B. Cash flows decrease.
C. Cash flows are unchanged.
D. The change in cash flows cannot be determined.
87.According to the statement of cash flows, cash flows from financing could be positive if:
A. the firm repaid more debt than it added.
B. the firm added more debt than it repaid.
C. interest rates were low on outstanding debt.
D. the firm sold portions of its plant and equipment.
88.Which of the following categories of a statement of cash flows is affected by the payment of interest expense?
A. Cash flows from operations
B. Cash flows from noncash expenses
C. Cash flows from investments
D. Cash flows from financing
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