Multiple choice questions on statement of cash flows.
1.The category that is generally considered to be the best measure of a company ability to continue as a going concern is
a)cash flows from operating activities.
b)cash flows from investing activities.
c)cash flows from financing activities.
d)usually different from year to year.
2.If a company has both an inflow and outflow of cash related to property, plant, and equipment, the
a) two cash effects can be netted and presented as one item in the investing activities section.
b)cash inflow and cash outflow should be reported separately in the investing activities section.
c) two cash effects can be netted and presented as one item in the financing activities section.
d)cash inflow and cash outflow should be reported separately in the financing activities section.
3.Flynn Company reported a net loss of $20,000 for the year ended December 31, 2008. During the year, accounts receivable decreased $10,000, merchandise inventory increased $16,000, accounts payable increased by $20,000, and depreciation expense of $10,000 was recorded. During 2008, operating activities
a)used net cash of $4,000.
b) used net cash of $16,000.
c) provided net cash of $4,000.
d)provided net cash of $16,000.
4.The statement of cash flows
a)must be prepared on a daily basis.
b)summarizes the operating, financing, and investing activities of an entity.
c) is another name for the income statement.
d)is a special section of the income statement.