1.A purchase of new equipment on a note payable under the direct method would be

Question

1.A purchase of new equipment on a note payable under the direct method would be reported:
a. As a separate disclosure as a non-cash transaction b. in the investing section of the cash flow statement c. in the operating section of the cash flow statement d. in the financing section of the cash flow statement

2.An increase in long-term mortgage payable would mean a:
a. Increase in cash flow from investing activities b. decrease in cash flow from investing activities c. increase in cash flow from financing activities d. decrease in cash flow from financing activities

3.Of the following, which would be added back to net income in the operating section of a cash flow statement using the indirect method?
a. Increase in inventory b. decrease in accounts payable c. increase in accounts receivable d. decrease in prepaid insurance

4. 3. Of the following, which is not classified as an investing activity on the statement of:
a. Sale of equipment for cash b. Purchasing land c. Collecting the principal on loans d. Selling goods and services

Explanation / Answer

d. in the financing section of the cash flow statement

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