Question

Multiple Choice Question 80

Investing activities include all of the following except

purchases and sales of property and equipment.

loans made and collected.

purchases and sales of another company’s stock.

issuing and repaying debt.

Multiple Choice Question 81

The safest way to make sure that all investing activities have been identified is to

identify any invoices received for property and equipment.

go through a company’s income statement line by line.

go through all purchase orders processed during the period.

go through a company’s balance sheet line by line.

Multiple Choice Question 82

When a company sells equipment for cash, which of the following amounts is reported in the investing section of the statement of cash flows?

Depreciation expense

Amount of cash received

Book value

Gain on sale of equipment

Multiple Choice Question 84

When a company purchases and retires its bonds, which of the following is the correct reporting on the statement of cash flows?

Gain or loss in financing section, amount of cash received in operating section.

Gain or loss in operating section, amount of cash paid in financing section.

Gain or loss in operating section, amount of cash paid in investing section.

Gain or loss in investing section, amount of cash received in operating section.

Answer 1

MCQ 80

Option D is the Correct Answer

Issuing and Repaying Debt is a financing activity and not an investing activity.

MCQ 82

Option B Amount of Cash Received is the Correct Answer

Whenever an asset is sold it is recorded at the amount the sale happens in the investment activities section of Cashflows statement.

MCQ 84

Option B is the correct answer.

As the retirement of bonds is the financing activity for the business so it should be reported under financing activities section of Cashflows statement.

MCQ 81

Option D is the Correct Answer.