Question :
11) Which of the following NOT a part of financing : 1232233
11) Which of the following is NOT a part of financing activities?
A) Paying dividends
B) Issuing stock
C) Paying off loans
D) Buying land
12) Operating cash flows affect:
A) current assets and current liabilities.
B) long-term asset accounts.
C) equity accounts.
D) long-term liability accounts.
13) Investing cash flows affect:
A) current assets and current liabilities.
B) long-term asset accounts.
C) equity accounts.
D) long-term liability accounts.
14) Financing activities affect:
A) current and long-term assets.
B) current and long-term liabilities.
C) current assets and current liabilities.
D) long-term liabilities and equity accounts.
15) Which of the following activities is computed differently using the two methods of formatting a statement of cash flows?
A) Operating activities
B) Financing activities
C) Investing activities
D) Both operating activities and investing activities
16) If $10,000 was generated from operations, $4,000 was used for investing activities and $6,000 was generated from financing activities, the cash balance must have increased by:
A) $ 6,000.
B) $ 8,000.
C) $12,000.
D) $20,000.
17) Operating activities are transactions and events associated with selling a product or providing a service related to the:
A) revenues and expenses reported on the income statement.
B) assets and liabilities reported on the balance sheet.
C) net income reported on the statement of retained earnings.
D) retained earnings reported on the balance sheet.
18) When comparing net cash provided by operations using the direct method versus indirect method, we find that:
A) net cash is higher using the indirect method.
B) net cash is lower using the indirect method.
C) there is no difference in the net cash between the two methods.
D) depreciation expense is used in the direct method.
19) As you approach graduation, you are evaluating your job offers from the following companies. Assuming that all other factors are equal (pay, benefits, location, job duties, industry, company size, company age etc.), for which of the following companies would you chose to work and why?
A
B
C
Cash flows from operations
+$115,000
$100,000
$0
Cash flows from investing activities
($20,000)
$0
Cash flows from financing activities
+$5,000
+$100,000
Net increase in cash for the most current year
+$100,000
+$100,000
+$100,000
A) Company A , the company is generating cash from its daily operations, investing in long-term assets and generating cash from its’ owners or borrowing a relatively small amount.
B) Company B, the company only generates cash from its daily operations and is not spending the cash for any other reason.
C) Company C, the company only generates cash from the owners.
D) All three companies offer the same opportunity for the future.
20) Are all increases to cash from financing activities the result of a favorable situation?
A) Yes, an increase to cash is always good.
B) No, cash could increase in this category as a result of replacing long-term assets.
C) Yes, this increase would reflect the results of the company’s daily activities.
D) No, although some increases in this category could be positive, some, such as an increase in long-term debt might be the result of an unfavorable situation.
21) Are all decreases to cash the result of an unfavorable situation?
A) Yes, decreases to cash are always bad.
B) No, cash could decrease as a result of acquiring long-term assets which the company needs to expand or stay competitive.
C) Yes, cash could decrease as a result of paying off long-term debt which is an unfavorable action to take.
D) No, cash could decrease because the company issued more stock.
22) Acme Company sold an asset with a book value of $56,000 for $100,000 cash. Which of the following is a TRUE statement?
A) Gain on sale equals $100,000 and Cash inflow equals $100,000.
B) Gain on sale equals $56,000 and Cash inflow equals $56,000.
C) Gain on sale equals $44,000 and Cash inflow equals $100,000.
D) Gain on sale equals $100,000 and Cash inflow equals $46,000.
23) A company sold an asset with a book value of $56,000 for $35,000 cash. Which of the following is a TRUE statement?
A) Loss on sale equals $35,000 and Cash inflow equals $35,000.
B) Loss on sale equals $56,000 and Cash inflow equals $56,000.
C) Loss on sale equals $21,000 and Cash inflow equals $35,000.
D) Loss on sale equals $35,000 and Cash inflow equals $21,000.
