When a statement of cash flows is prepared using the indirect methoo: Select one

Question

When a statement of cash flows is prepared using the indirect methoo: Select one: a. Net income is the starting point in determining cash flows from Investments b. Cash paid for dividends is not included c. Cash received for issuing common stock would be added in the financing section d. Depreciation is subtracted in the Operations section The statement of cash flows (indirect method) would disclose the purchase of Treasury Stock: Select one: ? a. In the financing activities section b. In the investing activities section c.In the operating activities section d. In the production section

Explanation / Answer

1) When a statement of cash flow is prepared using the indirect method

So answer is c) Cash received for issuing common Stock would be added in the financing activities section

2) The statement of cash flow (indirect method) would disclose the purchase of treasury stock

So answer is a) in the financing activity section

3) if the indirect method is used to prepare statement of cash flow which of the following would be added to net income to arrive at net cash flow from operating activities

So answer is C) Decrease in prepaid expenses

4) Assuming that the indirect method is used, which of the following would be added to net income to arrive at net cash flow from operating activities.

So answer is c) Loss on disposal of equipment

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