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Unformatted text preview: ACCT 112 Homework Questions Chapter 17 1. Noncash investing and financing transactions [A] are excluded from the statement of cash flows. [B] appear in both the investing and financing activities sections. [C] appear as a separate schedule on the statement of cash flows. [D] appear in either the investing or financing activities section, but not both. 2. How are cash equivalents treated on a statement of cash flows? [A] They are disclosed in the investing activities section. [B] They are combined with the Cash account. [C] They are disclosed in the financing activities section. [D] They are disclosed in the operating activities section. 3. The primary purpose of the statement of cash flows is to provide information [A] about a company’s investing and financing activities during an accounting period. [B] about a company’s cash receipts and cash payments during an accounting period. [C] regarding the results of operations for a period of time. [D] regarding a company’s financial position at the end of an accounting period. 4. Management would not use the statement of cash flows to [A] assess the liquidity of the business. [B] evaluate the effects of major policy decisions involving investments and financing. [C] determine dividend policy. [D] determine the financial position of the company. 5. Investors and creditors would find the statement of cash flows least useful in assessing [A] ability to generate positive future cash flows. [B] financial position at a point in time. [C] ability to pay dividends and liabilities. [D] need for additional financing. 6. Elkwood Corporation acquired a land site with a building by issuing a 30-year mortgage payable. In Elkwood’s statement of cash flows, this transaction should be shown [A] only as a cash flow from financing activity for the issuance of the mortgage payable. [B] in the schedule of noncash investing and financing transactions. [C] only as a cash flow from investing activity for the purchase of the land and building. [D] as both a cash flow from investing activity and a cash flow from financing activity. 7. Which of the following is reported as a noncash investing and financing transaction on the statement of cash flows?...
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- Spring '08
- Cash Flow Statement, activities section