CHAPTER 11
1.The Statement of Cash Flows:
Lists all cash flows over the life of a company.
Breaks down all cash transactions into investing and financing cash flows.
Shows that the change in total cash from one year to the next is equal to the net operating, investing, and financing cash flows.
Has two methods for investing cash flows – direct and indirect.
2.The sale of a good or service is classified in the statement of cash flows as a(n):
Investing activity.
Operating activity.
Financing activity.
Noncash activity.
3.Operating cash flows exclude:
Interest received.
Interest paid.
Dividends received.
Dividends paid.
4. Dividends received from an investment is classified as a(an) __________ cash flow, and paying dividends on stock issued is classified as a(an) ____________ cash flow on the Statement of Cash Flows.
Operating; Operating
Operating; Financing
Financing; Operating
Investing; Financing
5._________ is an investing cash flow and ________ is a financing cash flow, as reported on the Statement of Cash Flows.
Issuing bonds; selling investments
Purchasing land; repaying a bank loan
Receiving cash from the sale of inventory; paying cash dividends
Purchasing treasury stock; lending cash to an employee
6.Cash flows from financing activities do not include:
Retirement of bonds payable.
Cash dividends paid.
Issuance of common stock.
Interest received.
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