5) Which of the following sections of the statement of cash flows indlade activi

Question

5) Which of the following sections of the statement of cash flows indlade activities that increase and decrease long-term assets? A) the investing section B) the non-cash investing and financing section C) the operating section D) the financing section ) Which of the following sections of the statement of cash fows include the issuance of stock and the 9) payment of cash dividends? A) the financing section B) the operating section C) the investing section D) the non-cash investing and financing section 10) Which of the following is a cash outflow for a financing activity on the statement of cash Sows? 0 A) purchase of treasury stock B) purchase of land C) purchase of long-term investments, such as the stock of another company D) loans made to another party 11) Walker Corp. uses the indirect method to prepare the statement of cash flows. Refer to the following11) section of the comparative balance sheet: Walker Corp Comparative Balance Sheet December 31,2014 and 2013 Increaseldecrease 2014 $18,000 3,000 48,000 $69,000 Cash Accounts Receivable Inventory Total assets $273,000132,000 $204,000 $45,000 48,000 180,000 S27,000 45,000 A) negative cash flow under the operating activities section B) negative cash flow under the investing activities section C) positive cash flow under the financing activities section D) positive cash fow under the operating activities section How will the change in Accounts Receivable be shown on the statement of cash flows?

Explanation / Answer

8) Activities that include increase or decrease of long term assets are called investing activities. For example: Purchase of machinery, sale of plant etc So correct answer is A) the investing section 9) Issue of stock and payment of dividend are included in financing section because financing sectio includes details regarding payment of dividend, issue of stock etc, So correct answer is A) the financing section 10)Financing section includes cashflows related to shareholders. So purchase of treasury stock is cash flow for financing activity. So correct answer is A) Purchase of treasury stock 11) Increase in current assets will lead to reduction of cashflow from operating activities. So increase in accounts recievable will lead to negative cashflow under operating activities. So correct answer is A) negative cashflow under the operating activities section

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