81. If the balance sheet shows the same beginning and ending balance for depreciable assets, there
A. have been no financing activities during the year
B. have been no investing activities during the year
C. may have been investing activities
D. may have been financing activities
E. have been no investing and financing activities during the year
82. Financing activities on the cash flow statement do not include.
A. issuance of stock
B. payment of dividends
C. borrowing from banks
D. payment of interest expense
E. acquiring previously issued bonds
83. Why is depreciation expense added back to net income in the operating section of the indirect cash flow statement?
A. depreciation expense represents cash outflows for a firm
B. depreciation expense represents cash inflows for a firm
C. depreciation expense represents a noncash expense that must be moved to the investing section of the cash flow statement
D. depreciation expense represents a noncash expense that must be added to net income to cancel its affect within the net income calculation
E. depreciation expense represents a cash expense that must be added to net income to cancel its affect within the net income calculation
84. If cash decreases by $10,000 during the year, liabilities decrease by $5,000, and shareholders’ equity increases by $5,000, what is the total change in noncash assets for the year?
A. a decrease of $5,000
B. an increase of $10,000
C. a decrease of $10,000
D. an increase of $5,000
E. an increase of $15,000
85. Which is a source of cash?.
A. increase in inventory
B. decrease in bonds payable
C. decrease in accounts payable
D. decrease in accounts receivable
E. increase in prepaid assets
86. Which is a use of cash?
A. an increase in inventory
B. a decrease in accounts receivable
C. decrease in equipment
D. an increase in accounts payable
E. an increase in bonds payable
87. In a statement of cash flows, interest payments to lenders should be classified as cash outflows for
A. operating activities
B. financing activities
C. investing activities
D. lending activities
E. exchange transactions
88. In a statement of cash flows, payments to acquire long-term bonds or other debt instruments with maturities greater than one year of other entities should be classified as cash outflows for
A. operating activities
B. financing activities
C. investing activities
D. lending activities
E. exchange transactions
89. In a statement of cash flows, proceeds from the issuance of common stock should be classified as cash inflows for
A. operating activities
B. financing activities
C. investing activities
D. lending activities
E. exchange transactions
90. The Smith Company had retained earnings at the beginning of the year totaling $100,000. At the end of the year retained earnings totaled $200,000. Depreciation was $50,000 for the year and the company paid dividends of $150,000. What is the amount recorded as Net Income in the operating activities section of the statement of cash flows prepared using the indirect method?
A. a net loss of $150,000
B. a net income of $150,000
C. a net income of $0
D. a net income of $250,000
E. a net loss of $50,000
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