Purpose: - Understand and interpret amounts reported on the statement of cash flows. Q1 The primary source of cash for an established company with a strong cash position should be (operating / investing / financing) activities. Q2 a. OPERATING ACTIVITIES report cash transactions that typically affect (CA / LTA / CL / LTL / SE) accounts. (Circle all that apply) b. INVESTING ACTIVITIES report cash transactions that typically affect (CA / LTA / CL / LTL / SE) accounts. (Circle all that apply) c. FINANCING ACTIVITIES report cash transactions that typically affect (CA / LTA / CL / LTL / SE) accounts. (Circle all that apply) Key: CA current asset; LTA long-term asset; CL current liability; LTL long-term liability; SE stockholders' equity. Q3 a. Of the following accounts, circle those that are used to compute net income: (interest revenue / interest expense / dividend revenue / dividends paid).
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Step 1: Q1: The primary source of cash for an established company with a strong cash position should be **operating** activities. Show more…
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Adi S.
1) Which of the following is correct about the statement of cash flows? A) A company with a net loss on the income statement will always have a net cash outflow from operating activities. B) A purchase of equipment is classified as a cash inflow from investing activities. C) Cash dividends received on stock investments are classified as cash flows from operating activities. D) Cash dividends paid are classified as cash flows from operating activities. 2) Which of the following is not correct about the statement of cash flows? A) Paying dividends to investors creates a cash outflow from financing activities. B) A purchase of equipment is classified as a cash outflow from investing activities. C) Cash dividends paid are classified as cash flows from operating activities. D) Cash dividends received on stock investments are classified as cash flows from operating activities. 3) The issuance of notes payable for borrowing is classified in the statement of cash flows as a(n): A) Operating activity. B) Investing activity. C) Financing activity. D) Noncash activity. 4) A company had the following amounts at the end of the year: Cash $ 11,200 Supplies Expense 1,500 Dividends 2,600 Service Revenue 23,500 Prepaid Rent 4,300 Salaries Expense 8,200 Accounts Payable 12,700 Land 36,900 What amount would the company report for net income? A) $11,200. B) $6,900. C) $13,800. D) $42,300. 5) Outstanding common stock refers to the total number of shares: A) Issued. B) Issued plus treasury stock. C) Issued less treasury stock. D) Authorized.
Madhur L.
The statement of cash flows classifies cash receipts and cash payments by these activities: (a) operating and non operating. (b) operating, investing, and financing. (c) financing, operating, and non operating. (d) investing, financing, and non operating.
Jennifer S.
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