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MC.Ch.23 - Practice MC for Chapter 23 Page 1 CHAPTER 23...

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Practice MC for Chapter 23 Page 1 CHAPTER 23 STATEMENT OF CASH FLOWS MULTIPLE CHOICE—Conceptual 21. It is an objective of the statement of cash flows to a. disclose changes during the period in all asset and all equity accounts. b. disclose the change in working capital during the period. c. provide information about the operating, investing, and financing activities of an entity during a period. d. none of these. 25. Cash equivalents are 26. A company borrows $10,000 and signs a 90-day nontrade note payable. In preparing a statement of cash flows (indirect method), this event would be reflected as a(n) 28. An increase in inventory balance would be reported in a statement of cash flows using the indirect method (reconciliation method) as a(n) 36. Crabbe Company reported $80,000 of selling and administrative expenses on its income statement for the past year. The company had depreciation expense and an increase in prepaid expenses associated with the selling and administrative expenses for the year. Assuming use of the direct method, how would these items be handled in converting the accrual based selling and administrative expenses to the cash basis? Increase in Depreciation Prepaid Expenses a. Deducted From Deducted From b. Added To Added To c. Deducted From Added To d. Added To Deducted From
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Practice MC for Chapter 23 Page 2 41. When preparing a statement of cash flows, a decrease in prepaid insurance during a period would require which of the following adjustments in determining cash flows from operating activities? Indirect Method Direct Method
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