1. A lender wants to know if they can collect on their loans. A cash flow statement for the company owing the money will help the lender to predict all EXCEPT:
A) their ability to pay debts and dividends.
B) future cash flows.
C) management decisions.
D) future net income.
2. The cash flow statement is the communicating link between the:
A) statement of stockholders' equity and the cash reported on the balance sheet.
B) income statement and the statement of stockholders' equity.
C) cash reported on the balance sheet and the accrual based income statement.
D) cash reported on the balance sheet and the statement of stockholders' equity.
3. Which of the following is NOT a part of operating activities?
A) Paying dividends
B) Paying payables
C) Earnings revenue
D) Paying utilities
4. Operating cash flows affect:
A) current assets and current liabilities.
B) long-term asset accounts.
C) equity accounts.
D) long-term liability accounts.
5. In order to be successful over the long run, the main source of a company's cash must come from:
A) managerial activities.
B) investing activities.
C) operating activities.
D) financing activities.
6. Cash paid for interest is:
A) A financing activity
B) An investing activity
C) A noncash activity
D) An operating activity
7. Cash paid on a loan to a supplier is:
A) A financing activity
B) An investing activity
C) A noncash activity
D) An operating activity
8. When calculating cash received from customers an increase in receivables:
A) Is added to sales
B) Is not considered
C) Is subtracted from net income
D) Is subtracted from sales
9. Depreciation Expense is:
A) Added back to sales in the direct method of calculating cash flows from operations
B) Subtracted from sales in the direct method of calculating cash flows from operations
C) Ignored in the direct method of calculating cash flows from operations
D) Combined with other noncash items on the income statement and added to the schedule of non-cash investing and financing activities
10. The repayment of debt by issuing common stock is:
A) A financing activity
B) An investing activity
C) A noncash activity
D) An operating activity