26) A business issues 10-year bonds payable in exchange for common stock. This transaction would be reported on the statement of cash flows in:

A) operating activities.

B) financing activities.

C) investing activities.

D) a separate schedule.


27) Common stock in exchange for a warehouse would be reported in the statement of cash flows in:

A) a separate schedule.

B) operating activities.

C) financing activities.

D) investing activities.


28) If a gain of $70,000 is incurred in selling equipment having a book value of $225,000, cash flow will increase:

A) $295,000.

B) $155,000.

C) $70,000.

D) some other number.

29) Land costing $60,000 was sold for $50,000. What was the effect on the investing activities?

A) Increase $50,000

B) Decrease $10,000

C) Decrease $70,000

D) Increase $10,000


30) Financing activities include transactions with owners and creditors.


31) Dividends received on investments made in the stock of other companies is an example of a financing activity.

32) One section of a statement of cash flows is purchasing activities.


33) Changes in current assets and current liabilities accounts deal with financing activities.


34) An example of operating activities is the payment of dividends.


35) If $200,000 of a company’s own stock is sold, it is shown in the financing activities section.



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