ACC 212: Chapters 12 practice review

Which of the following are NOT sections of cash flow?

• Operating activities

• Investing activities

• Financing activities

• Sales activities

what is the purpose of the operating section of cashflows? and what does it do?

• Includes transactions that effect net income.

• The operating section of cashflows shows the cash generated in a company's main business activities. including transactions that effect net income.

• * The operating section of cashflows helps investors understand the cash flow from the company's day-to-day operations.

• I have not a clue.....

This activity Generally includes transactions and events that affect net income.

(EX: receipt of dividend revenue, or interest revenue/paying cash for operating expenses including salaries and wages)

which of the following describes Financing activities?

• Events that affect long-term liabilities and equity

• Cash to pay dividends to shareholders and pay off long-term debt (notes payable or bonds payable)

• Borrowing money from banks or issuing bonds to raise capital

• cash to buy plant asset

What type of cash flow begins with money received from customers?

Which cash flow statements have different starting numbers but end with a change in cash?

• indirect

• direct

• both

• neither

Which cash flow method is most preferred by GAAP?

Investing actives are those that generally include transactions and events that come from the purchase and sale of long-term assets.

• yes

• no

which of the following are examples of investing section of cash flow?

• cash to pay dividends to shareholders, paying off long term debt

• cash from issuing common and preferred stock.

• cash to buy plant assets, buy intangible assets, buy investments

• cash from selling plant assets, selling intangible assets

• cash sales to customers, collections on credit sales.

What happens to net income when receivables increase(go up, debited)?

• subtract the increase of net income

• add the increase of net income

• sales revenue is credited

• cash is credited