Quiz 6 SCF key - 2 Repayment of long-term debt 3 Purchase...

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Quiz 6 (SCF) Key 1. A loss on the sale of a plant asset in the ordinary course of business should be presented in a statement of cash flows prepared using the indirect method as 1. a cash inflow from investing activities. 2. a cash inflow from financing activities. 3. an addition to net income. 4. a deduction from net income. 2. The most likely situation in which reported earnings are positive, but operations are consuming rather than generating cash would be: 1. a rapidly growing company. 2. a company reporting large noncash expenses. 3. a company using very conservative accounting standards that lower earnings. 4. a company paying large cash dividends to its shareholders. 3. Cash flows from financing activities would be reduced by which of the following? 1. Purchase of inventory
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Unformatted text preview: 2. Repayment of long-term debt 3. Purchase of machinery 4. Payment of interest 4. In a statement of cash flows under the U.S. standards, interest payments to lenders and other creditors should be classified as cash outflows for 1. borrowing activities. 2. operating activities. 3. investing activities. 4. financing activities. 5. Which of the following would be an example of an investing activity ? 1. Issuance of long-term bonds 2. Issuance of common stock 3. Payment of cash dividends 4. Sale of plant assets 6. In a statement of cash flows (indirect method), an increase in inventories should be presented as 1. an inflow of cash. 2. an inflow and outflow of cash. 3. an addition to net income. 4. a deduction from net income....
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