Accounting_203_Chapter_13_Test

Accounting_203_Chapter_13_Test - ACCOUNTING 203 Chapter 13...

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ACCOUNTING 203 Chapter 13 Practice Test True and False Questions 1. In the statement of cash flows, dividend payments to the company’s stockholders are treated as a “source” rather than as a “use” of cash. 2. The same amount for “net cash provided by operating activities” will be obtained regardless of whether the direct method or the indirect method is used to construct the statement of cash flows. 3. Transactions that involve acquiring or disposing of noncurrent assets are generally classified as operating activities on the statement of cash flows. 4. Under the indirect method of determining the net cash provided by operating activities on the statement of cash flows, depreciation is added to the net income for the period. 5. On the statement of cash flows, the indirect method adjusts ending retained earnings to reconcile it to net cash flows from operating activities. Multiple Choice Questions 6. Which of the following would be considered an investing activity and a “use” of cash for the purpose of constructing a statement of cash flows? A) Dividends paid to the company’s own stockholders. B) Payment of interest on the company’s debt. C)
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This note was uploaded on 05/17/2011 for the course ACCT 203 taught by Professor Mac during the Spring '11 term at Chicago State.

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Accounting_203_Chapter_13_Test - ACCOUNTING 203 Chapter 13...

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