Question

1. The best measure of a company's ability to generate sufficient cash is cash provided by:

            a.   financing activities.

            b.   investing activities.

            c.   operating activities.

            d.   processing activities.

            e.    None of the above.

2. A company's cash flow from investing activities includes
   1. cash paid for common dividends.
   2. cash received from issuance of common stock.
   3. cash received from sale of plant equipment.            
   4. cash paid for employee salaries.
   5. Both a and b

3. A company's cash flow from operating activities includes
   1. cash paid as dividends.
   2. cash received from issuance of common stock.
   3. cash received from sale of plant equipment.
   4. cash paid for employee salaries
   5. Both a and b

4. A company's cash flow from financing activities includes
   1. cash paid as dividends.
   2. cash received from issuance of common stock.
   3. cash received from sale of plant equipment.
   4. cash paid for employee salaries
   5. Both a and b

5. If accounts receivable decreased during the year,

            a.   revenues on an accrual basis are less than cash collected.

            b.   revenues on an accrual basis are greater than cash collected.

            c.   revenues on an accrual basis are the same as cash collected.

            d.   expenses on an accrual basis are greater than expenses on a cash basis.

            e.    None of the above.

6. If accounts payable decreased during the year,

            a.   revenues on an accrual basis are less than cash collected.

            b.   expenses on an accrual basis are less than cash paid.

            c.   expenses on an accrual basis are greater than cash paid.

            d.   expenses on an accrual basis are the same as cash paid.

            e.    None of the above.

7. The declaration and payment of a stock dividend would be reported in which section of the Statement of Cash Flows?
   1. Operating Activity
   2. Investing Activity
   3. Financing Activity
   4. Cannot determine based on this information
   5. None of the above

Answer 1

	!)	Best measure
		operating activities
	2)	option c
		cash received from sale of plant Equipment
	3)	option d
		cash paid for employees salaries
	4)	option e
		both a and B
	5)	option b
		revenues on an accrual basis are greater than the cash
		collected
	6)	option c
		expenses on an accrual basis are greater than the cash paid
	7)	option c
		financing activity