16) Selling stocks of other companies for cash would result in:

A) an increase of cash flow from investing activities.

B) a decrease of cash flow from investing activities.

C) an increase of cash flow from financing activities.

D) a decrease of cash flow from financing activities.

17) An increase in long-term note payable would mean:

A) an increase of cash flow from investing activities.

B) a decrease of cash flow from investing activities.

C) an increase of cash flow from financing activities.

D) a decrease of cash flow from financing activities.

 

18) Activities that increase and decrease as a result of selling a company’s stock are:

A) marketing activities.

B) operating activities.

C) investing activities.

D) financing activities.

 

19) Activities that pay and collect interest on loans are:

A) financing and investing activities.

B) operating and financing activities.

C) operating and investing activities.

D) marketing activities.

 

20) Of the following items, which is not classified as an investing activity on the statement of cash flows?

A) Sale of a plant asset for cash

B) Purchasing land

C) Collecting loans

D) Selling goods and services

21) Carolina Company sold a machine for $12,000 cash, which had an original cost of $19,000 and accumulated depreciation of $6,000. The amount of cash provided by this sale is:

A) $12,000.

B) $13,000.

C) $18,000.

D) $19,000.

 

22) A transaction of issuance of stock in exchange for equipment would be recorded as a(n):

A) operating activity.

B) investing activity.

C) financing activity.

D) noncash investing and financing activity.

 

23) A statement of cash flows would not disclose the effect of which of the following transactions?

A) Stock dividends declared

B) Bonds payable issued

C) Purchase of treasury stock

D) Capital stock issued to acquire fixed assets

 

24) A statement of cash flows would not disclose the effect of which of the following transactions?

A) Dividends received on stock investments

B) Receiving cash from customers on product sales

C) Discarding an asset that had been fully depreciated

D) None of these answers are correct.

25) When a corporation pays dividends it:

A) does not affect the cash flow statement.

B) is shown as an investing activity.

C) is shown as a financing activity.

D) is shown as an operating activity.

 

 

 



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