Question : 71. Cash flows from acquiring and disposing of long-term assets classified : 1224831

 

 

71. Cash flows from acquiring and disposing of long-term assets are classified as: 
A. operating activities.
B. investing activities.
C. financing activities.
D. purchasing activities.

 

72. Which of the following is not an investing activity? 
A. Purchase of investments for cash.
B. Purchase of equipment for cash.
C. Sale of merchandise for cash.
D. Sale of land for cash.

 

73. Cash flows from borrowing and paying off a 180-day bank loan are classified as: 
A. operating activities.
B. investing activities.
C. financing activities.
D. purchasing activities.

 

74. Which of the following activities is most likely to have a cash flow effect? 
A. Revaluing assets to reflect their market values
B. Declaring cash dividends
C. Reissuing treasury stock
D. Issuing stock to acquire a patent

 

75. Cash flows from issuing and repurchasing stock or issuing and repaying debt are classified as: 
A. operating activities.
B. investing activities.
C. financing activities.
D. purchasing activities.

 

76. Which of the following is not a financing activity? 
A. Issuing bonds for cash
B. Selling an investment in IBM stock for cash
C. Purchasing a company’s own stock (treasury stock) for cash
D. Making a cash payment to repay a bank loan

 

77. The statement of cash flows: 
A. along with the balance sheet and income statement is prepared on the accrual basis.
B. along with the balance sheet and statement of retained earnings is dated as of a specific date.
C. along with the balance sheet is used to analyze liquidity.
D. ties the balance sheet to the statement of retained earnings.

 

78. Which balance sheet accounts are most affected by operating activities? 
A. Current assets and current liabilities
B. Long-term assets
C. Long-term liabilities
D. Stockholders’ equity

 

79. Which of the following statements is false regarding how the cash flow effects of the changes in the equipment and accumulated depreciation accounts would be reported on a statement of cash flows if the indirect method is used to prepare the operating activities section? 
A. Cash proceeds from the sale of the equipment would be reported as a cash inflow in the investing activities section.
B. The cash paid to purchase equipment would be reported as a cash outflow in the investing activities section.
C. Depreciation expense would be added to net income in the operating activities section.
D. A loss on the sale of the equipment would be subtracted from net income in the operating activities section.

 

80. The Responsible Company completed the following transactions involving investments during 2012.
 

Purchased 20-year treasury bonds for

$80,000

Sold available-for-sale securities (cost $80,000) for

$100,000

Purchased trading securities for

$55,000

 

 

Responsible uses the indirect method to prepare the operating activities section of the statement of cash flows. The following statements describe how Responsible reported the cash flow effects of the transactions above on its 2012 statement of cash flows. Which of the following has been reported incorrectly by Responsible? 
A. Payments of $80,000 for 20-year treasury bonds were reported as a cash outflow in the operating activities section.
B. Proceeds of $100,000 were reported as a cash inflow in the investing activities section.
C. Payments of $55,000 for trading securities were reported as a cash outflow in the investing activities section.
D. A gain of $20,000 on the sale of available-for-sale securities was deducted from net income in the operating activities section.

 

 

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