Financial Calculations: Understanding Statement of Cash Flows (Other (Not Listed) Sample)

1 In the statement of cash flows, which of the following would be classified as an operating cash flow? Choose ALL that apply (this is an all or nothing question – you must correctly choose all correct answers to receive any credit for this question).
1 Collection of cash from the sale of land.
2 A $50,000 increase in the accruals account on the balance sheet.
3 Purchase of inventory for $25,000 cash.
4 Principle reduction payment on a short-term bank loan.
5 None of the actions listed above would be classified as an operating cash flow.
2 In the statement of cash flows, which of the following would be classified as an investing cash flow? Choose ALL that apply (this is an all or nothing question – you must correctly choose all correct answers to receive any credit for this question).
6 A long-term debt principal payment of $45,000.
7 Sale of a machine no longer used by the firm for $250,000.
8 Proceeds from the bank from a short-term loan of $35,000.
9 Purchase of land for $250,000.
10 None of the actions listed above would be classified as an investing cash flow.
3 In the statement of cash flows, which of the following would be classified as financing activity? Choose ALL that apply (this is an all or nothing question – you must correctly choose all correct answers to receive any credit for this question).
$150,000 issuance of new long-term debt (i.e., issuing new corporate bonds).
Sale of machinery for $100,000.
$250,000 purchase of inventory.
$725,000 issuance of new common stock.
Purchase of inventory for $225,000.
4 On the statement of cash flows, cash outflows arise fromassets,liabilities, and stockholders' equity.
increasing; increasing; decreasing
increasing; decreasing; decreasing
decreasing; increasing; increasing
decreasing; increasing; decreasing
increasing; increasing; increasing
decreasing; decreasing; decreasing
none of the combinations listed above are correct.
5 Which of the following should be SUBTRACTED from net income + depreciation when constructing a statement of cash flows using the indirect method? Choose ALL that apply (this is an all or nothing question
– you must correctly choose all correct answers to receive any credit for this question).
Increase in an asset account that is related to an account on the income statement.
Decrease in an asset account that is related to an account on the income statement.
Increase in a liability account that is related to an account on the income statement.
Decrease in a liability account that is related to an account on the income statement.
None of the above.