Quiz3c - ADM 2340 Autumn 2007 Quiz 3 Name: Student ID: DO...

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ADM 2340 Autumn 2007 Quiz 3 Name: Student ID: DO NOT OPEN THE QUIZ BOOKLET UNTIL TOLD TO DO SO
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Each correct answer is worth 1 point. 1. Purchase of equipment on credit is an example of a A) cash flow from operating activities. B) cash flow from investing activities. C) cash flow from financing activities. D) None of the above is correct. 2. Which of the following statements is true? A) Repayment of the loan is an operating cash flow; payment of the interest on the loan is a financing cash flow. B) Repayment of the loan and payment of the interest on the loan are operating cash flows. C) Repayment of the loan and payment of the interest on the loan are financing cash flows. D) Repayment of the loan is a financing cash flow; payment of the interest on the loan is an operating cash flow. 3. Which statement regarding the indirect cash flow method is not true? A) Loss on sale of equipment is added to net income. B) An increase in accounts receivable is added to net income. C) An increase in merchandise inventory is subtracted from net income. D) An increase in prepaid expense is subtracted from net income.
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Quiz3c - ADM 2340 Autumn 2007 Quiz 3 Name: Student ID: DO...

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