Proverbs in things fall apart

10-1© 2011 Cengage Learning.All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.CHAPTER 10—STATEMENT OF CASH FLOWSMULTIPLE CHOICE1.Which of the following is nota purpose of the statement of cash flows?a.To show cash flow from operations.b.To show cash flow from financing activities.c.To show cash flow from investing activities.d.To show all investing and financing transactions.e.To show operating expenses for a period of time.ANS:E2.Which of the following is nota typical cash flow under operating activities?a.cash inflows from sale of goods or servicesb.cash inflows from interestc.cash outflows to employeesd.cash outflows to supplierse.cash inflows from sale of property, plant, and equipmentANS:E3.Which of the following is nota typical cash flow under investing activities?a.cash inflow from receipt of loansb.cash inflow from sale of property, plant, and equipmentc.cash outflow for payment of amounts borrowedd.cash outflow for loans to other entitiese.cash outflow for purchase of property, plant, and equipmentANS:C4.Which of the following is nota typical cash flow under financing activities?a.cash inflow from sale of equity securitiesb.cash inflow from sale of bondsc.cash outflow for payment of dividendsd.cash outflow for loans to other entitiese.cash outflow for payment of amounts borrowedANS:D5.Working capital is defined as:a.total assets less intangible assetsb.current assets divided by current liabilitiesc.current assets less current liabilitiesd.total assets less current assetse.current assets less liabilitiesANS:C
10-2© 2011 Cengage Learning.All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.6.Amortization of patents can be added to income in the operations section of the statement of cash flows because:a.it is not a tax deductible expenseb.it results in a cash inflowc.it does not require the outlay of cashd.patent amortization is not an expensee.it represents an inflow of cashANS:C7.Which of the following is notan item added back to income in the operations section of the statement of cash flows when using the indirect presentation?a.depreciationb.amortization of goodwillc.increase in deferred income taxesd.amortization of bond premiume.amortization of patentsANS:D8.Which of the following transactions is notreflected in a statement of cash flows?a.sale of treasury stockb.declaration of a stock dividendc.purchase of foreign subsidiary with cashd.issuance of convertible bondse.purchase of equipment with cashANS:B9.Management should notuse the statement of cash flows for which of the following purposes?a.To determine dividend policy.b.To determine cash flow from operations.c.To determine cash flow from investing activities.d.To determine cash flow from financing activities.e.To determine the balance in accounts receivable.ANS:E10.Tim Company had sales of $30,000, increase in accounts payable of $5,000, decrease in accounts receivable of $1,000, increase in inventories of $4,000, and depreciation expense of $4,000. What was the cash collected from customers?a.$31,000b.$35,000c.$34,000d.$25,000e.$26,000ANS:A