Question

Which of the following is not a use of cash? Repayment of bond payable Purchasing supplies...

Which of the following is not a use of cash?

Repayment of bond payable
Purchasing supplies for cash
Paying dividends to stockholders
Buying inventory on account

Which of the following cash flows results from an operating activity?

Paying dividends to stockholders
Repaying note payable
Purchasing equipment
Receiving interest on investment
The two approaches to reporting cash flows provided by operating activities are the
direct and indirect methods.
the basic and standard methods.
the gross margin and contribution margin methods.
the liquidity and profitability methods.

Which of the following methods of reporting cash flows provided by operating activities does the Financial Accounting Standards Board recommend

The indirect method
The direct method
Either the indirect method or the direct method
Neither the indirect method nor the direct method
Business   Accounting   
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Homework Answers

Answer #1

Which of the following is not a use of cash?-

Buying inventory on account.

Not use of cash because we are buying inventory on credit basis.

Which of the following cash flows results from an operating activity?-

Receiving interest on investment.

Short term investments are treated as trading securities and purchases from it and proceeds from sale of investments are included in operating activity.

The two approaches to reporting cash flows provided by operating activities are the-

Direct and indirect methods.

Direct method- Records all transactions on a cash basis.

Indirect method- Basis on an accrual accounting.

Which of the following methods of reporting cash flows provided by operating activities does the Financial Accounting Standards Board recommend-

The direct method.

Because it gives indication of cash flows in and out of business.

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